Your rate depends on your individual circumstances — mainly how much you're looking to borrow and your credit history. There's no single fixed rate we offer everyone; each lender in our panel looks at your application and offers a rate that reflects your situation. That's why we ask a few questions upfront, so we can point you toward options that are realistic for you rather than a generic headline rate that might not apply.

The way car loans works is that you borrow money from a lender to cover the cost of your new or used car and then pay it back in affordable monthly repayments. There are several types of loan available and car finance is the catch-all term used to describe them.

You’ll need to know how much you want to borrow and how long you want to borrow it for (the loan term) to find the car finance deal that’s right for you. You could also put down a deposit to reduce the total loan amount. If your loan is approved, you’ll then pay it back in monthly instalments, plus interest, for the duration of the loan term, which typically lasts between one and five years. Depending on the deal you choose, your finance might be secured against the car.

There are several types of car loan to choose from but the most common are Hire Purchase (HP), Personal Contract Purchase (PCP).

Hire Purchase: The loan is secured against the car and you won’t own it until you’ve reached the end of your agreement and paid the ‘Option to Purchase’ fee. You might need to put down a deposit but it’s unlikely that you’ll have to agree to any mileage restrictions.

Personal Contract Purchase: Loans are also secured against the vehicle, but you don’t automatically own the car when the loan term ends. Instead, you can choose to give it back, use any positive equity as a deposit in a new deal, or buy the car by paying the balloon payment. Monthly payments could be lower than with HP car finance, but you may have to agree to annual mileage limits.

Deciding on the best car loan for you will depend on your individual circumstances, the car you want to buy, and how you want to use it.

With a Hire Purchase (HP) loan, you’ll own the car at the end of your loan term, but your monthly repayments might be higher than other options and you won’t be able to sell or change the car during your agreement.

A Personal Contract Purchase (PCP) loan could offer the lowest monthly repayments, but you may have to agree to mileage restrictions, and you won’t automatically own the car at the end of the term. At the end of the agreement you can decide whether you want to return the car, or pay the final balloon payment to keep the car.

No matter which loan option you choose, at Car Finance 247, we’ll always look to try and find you the best deal from our panel of lenders.