Top 10 most Googled Car Finance questions

Have a burning unanswered question about car finance? We’ve compiled the answers to the top 10 most Googled car finance questions, all in one place

Written by Verity Hogan
Main image

1. Does car finance affect a mortgage?

Yes, car finance can affect your mortgage. When you apply for a finance product like a mortgage, the lender will look at your credit history to help decide whether they’re willing to offer you a loan or not. Car finance can help or hinder your mortgage application. If you’ve made all your payments on time, this can show lenders that you’re a responsible borrower but, if you have a large car loan to pay off, this could increase the amount of overall debt you have and lower the mortgage amount you’ll be offered.

2. Can I sell a car on finance?

This depends on the type of car finance you have. If you’ve taken out a personal car loan, you can do what you want with the car, including sell it! But if you have an HP or PCP deal, you won’t own the car or be able to sell it until the end of your agreement.

Don’t want to wait? You could opt to settle your finance early. Contact the finance company to get your settlement figure and, once you’ve paid it, you’ll be free to sell or part-exchange the car.

3. What’s the best way to finance a car?

The best way to finance a car is to choose an agreement that suits you and your circumstances. There are several things you should consider before deciding on a deal. These include whether car ownership is important to you, if you like to change car regularly, how you use your car, how much you can afford to pay per month and what your credit score looks like. You can then compare different types of car finance to find the right deal for you. Working with an online finance broker could help; at CarFinance 247, for example, we’ll look to find you the best deal from our panel of lenders.

4. What are the different types of car finance?

There are several types of car finance available but two of the most popular are hire purchase or HP and personal contract purchase or PCP. HP car finance is secured against your vehicle. You’ll pay back the loan in affordable monthly repayments and once the agreement ends (and you’ve paid the Option to Purchase fee) the car is all yours.

PCP works in a similar way but offers more options when you reach the end of your loan period. You can choose whether you want to buy the car by paying the balloon payment, hand it back, or use any positive equity, should there be any, as a deposit in a new deal.

Find out more about types of car finance here.

5. Can you swap finance from one car to another?

Unfortunately, as every car loan is tailored to your individual circumstances and the vehicle you’ve financed, you can’t just swap finance from one car to another. But that doesn’t mean you have to get stuck with a car you don’t want or can no longer afford. You could choose to end your agreement early by paying the settlement figure or keep the same car and change your deal by refinancing.

6. How does car finance work?

Car finance lets you spread the cost of a car into affordable monthly payments in return for paying interest on the loan. It could be a good option for you if you don’t have the funds available to buy a car outright. When you apply for car finance, a lender will decide whether they are willing to approve your application and offer you a loan. An approval depends on different factors including your financial history, your affordability, and the car you’d like to buy.

7. Can I get car finance with an IVA?

It can be difficult to get car finance with an IVA (Individual Voluntary Arrangement). It can depend on the terms and conditions of your agreement. Lenders might ask for further information from your creditors and you should seek permission from your Insolvency Practitioner before applying. An IVA can stay on your credit file for up to six years so, while it may make restrict your options, it doesn’t have to prevent you from finding a car finance deal.

8. Can I get car finance with no deposit?

Yes, you can get car finance with no deposit. If you don’t have a lump sum to put down or a part-exchange, no deposit deals are available. This can depend on the type of agreement you’re looking for, the lender that approves you, and your individual circumstances. Some dealerships might ask you to pay a reservation fee, but you could find a car and drive it away without paying a penny upfront!

9. Can I get bad credit car finance?

Yes, you could find bad credit car finance, even if you’ve been refused elsewhere. Credit scores come in all shapes and sizes and if you’ve had CCJs, an IVA, been in mortgage arrears or missed payments in the past, your score could be less than perfect. But don’t worry; there are lenders that specialised in helping people with poor credit find car finance.

10. What is the cheapest way to finance a car?

The cost of your car finance depends on a few factors including the type of agreement you have, the agreement length, and the APR. Bear in mind that the loan that has the lowest monthly repayments might not be the cheapest deal as you could end up paying back more in interest over time.

PCP car finance could be the cheapest finance option as, unlike with HP and personal loans, you don’t have to borrow the full amount that your vehicle is worth. Instead, you’ll borrow the difference between the price now and the amount the lender thinks your car will be worth at the end of your agreement – the Guaranteed Minimum Future Value (GMFV). But remember, you won’t own the car at the end of your agreement unless you choose to pay the balloon payment.



Verity Hogan

* The UK's number one online car finance broker by unique users to the website. Based on Hitwise data – 1,746,657 to CarFinance 247 vs. 666,020 for nearest competitor. January to December 2019.

96% of our customers recommend us: † Based on feedback left on independent review site Reviewcentre. May 2019.

CarFinance 247 is a trading name of CarFinance 247 Limited. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. (Registration Number 06035525).

CarFinance 247 is authorised and regulated by the Financial Conduct Authority for insurance distribution and credit broking (Firm Reference Number: 653019). CarFinance 247 is registered with the ICO (Registration Number Z1897658).

Finance is subject to status and is only available to UK residents aged 18 and over. Written quotations are available on request.

This site uses cookies so that we can provide you with the best user experience. By continuing to use the site you are consenting for cookies to be used. Further information on cookies and how you can disable them is available on our cookie policy.