How to get car finance: prices from under £100 per month

Looking to pay for your car in a series of affordable monthly instalments? Here's our quick guide to how to get car finance

BuyaCar team
Sep 29, 2019

By bypassing the need to pay for your car upfront, finance can help you to get a car that you really want, in good condition, with affordable monthly payments. This can make the difference between driving an old car that may have been cheap to buy but could throw up a series of big bills and running a much newer and more reliable car for a bitesize monthly bill.

Most new car buyers use finance to spread the cost of their vehicle and finance is becoming increasingly popular for used car purchases, too, with nearly 1.5 million used cars bought on finance over the last 12 months.

And it's easy to see why; it's simple to apply for finance online: select a used car, click apply for finance and BuyaCar's process takes just a few minutes and it's easy to compare quotes to both ensure that you're getting the best rate and the best car for your monthly budget. Finance approvals can be transferred between cars if you change your mind on the model you want. You can also use the finance to buy a car elsewhere.

Using finance normally means that you pay more in the long run than buying outright in cash, because of the interest charges and fees that are built into the repayments. However, finance incentives such as deposit contribution discounts can help to reduce this.

How to get car finance - in three steps

Choose Car and Budget

You know the advice: work out how much you want to spend and then find a product that meets your needs and budget.

That’s all very well if you’re looking for a toaster but buying a car can be more emotional, and it's always tempting to spend a little more to get the ideal colour, more modern gadgets or extra passenger space.

So it's worth being a little flexible. With out a rough idea of the amount that you want to spend, there’s plenty of help to find the right car for you.

When you have a good idea of what you’re looking for, you can search all vehicles available from BuyaCar, narrowing down your search based on factors such as price, fuel economy and number of seats. You can also search by finance cost, which will give you a far more realistic idea of what you can afford by looking at cash prices, as some cars with the same cash price cost much less than others to finance.

The reason for this is that PCP finance monthly payments cover the difference between a car's initial price and its expected value at the end of the contract. So, you should be able to finance a £30,000 car that is predicted to be worth £20,000 after three years for a similar monthly payment to a £20,000 one that's likely to be worth £10,000 after the same period - as both lose £10,000 in value. 

Every car displays a representative finance price, based on an interest rate that’s available to at least 51% of buyers.

You can adjust the finance calculator, below the detailed description of every car, to suit your situation and provide a more accurate quote depending upon your credit rating and the deposit you're able to put down.

If you find your ideal car elsewhere, then you can still choose to finance your car with BuyaCar or another finance provider - there’s no obligation to use finance from a particular dealership.


Decide on the right type of finance

Hire Purchase finance (also known as Conditional Sale) enables you to buy your car and spread the cost over a series of monthly payments - plus the deposit.

But if you’re not sure you want to own the car at the end of the contract then Personal Contract Purchase (PCP) could get you the same car for less per month than an equivalent Hire Purchase deal.

Your monthly payments are lower because they only cover the amount of value that the car is expected to lose during the agreement.

A the end, you can return the car and get a different one or buy it for the remainder of the cost - the optional final payment. See our full guide to buying a car on finance for more details


Apply for finance

If you’re happy with the car and the finance offer, then you can submit your finance application.

You’ll then get a personally tailored quote, with an interest rate that’s based upon your personal circumstances. As a result, this can vary from the "representative example", which is the interest rate that at least 51% of people who are accepted for that finance product will pay.

You can apply online in minutes. Most applicants can also complete ID verification checks online too.

Comparing finance

It can pay to compare finance quotes, particularly if you’re buying a used car from a dealership, where the rates offered aren’t always the most competitive available.

There are plenty of online brokers, including BuyaCar, who can arrange finance for a car that is bought elsewhere, at competitive rates.

The key figures to look at are the APR, or annual percentage rate, which includes the cost of interest and additional fees. The higher the number, the more you’ll pay on top of the car's price. Securing a 6.9% deal compared with a 10.9% offer on the same car could save you thousands, so don't just focus on the cash price when considering which car to go for.

Finance quotes should also include the total amount payable under the agreement, which makes it clear how much finance will cost you overall. Bear in mind, however, that PCP quotes include the optional final payment made if you want to buy the car under the total cost payable, though most drivers choose not to pay this. Therefore, if you don't intend to buy the car, you won’t pay that full amount.


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