Car finance – what you need to know

Think about it...

When you're looking to buy a new house, it's likely that you'll make sure you know how much you have to spend before you start looking.

Shouldn't this be the same process when buying a car? You don't want to fall in love with a car to only work out that it's out of your budget!

That's where CarFinance 247 come in. Finding the best finance options to fund your new car is what we do best. With your finance sorted before you even start shopping, you'll know exactly what your budget is, and how you'll pay for your new vehicle in the long run. It makes sense to find out what you can afford at the very beginning.

Why get your finance first?

It's really important as a car buyer to understand your finances before making a purchase. If you check out your finance options first, you'll be in a much better position to make your purchase. Here are four big reasons why getting your finance in place first with us makes sense:

  1. We'll search and compare to find the best available rate. We're independent, and compare loans from over 18 different lenders. So, you can find the best finance option for your exact circumstances, even if you have bad credit, making your repayments manageable.
  2. Finance preapproval will give you confidence in your budget. Rather than setting your sights on something unaffordable, or being overly-cautious, having finance in place means you'll be able to confidently shop to your budget.
  3. You're free to buy from any reputable dealer. Unlike getting finance at a dealership, if you get preapproved through us, you'll be able to search dealers across the UK for your perfect car.
  4. You can be sure it's the right deal for you. We're not tied to a particular lender, and search over 50 products from a panel of different lenders to find the right finance for you. It's more tempting to make a snap decision on the spot at a dealership, but with us you'll have time to review your options.

We're here every step of the way to help you choose your finance and find your perfect car. To get off on the right foot, simply click here to start your application.

Confused by which finance option you need?

Our page on car finance options gives you full details on loan types, but here's a snapshot:

  • Hire purchase (HP) – it's the most commonly used type of car finance, allowing you to hire your car until you've paid the loan back in full. You pay it off in set, monthly instalments, and interest rates are generally lower than some other loans.
  • Personal loan – unlike HP and PCP, these loans are unsecured, meaning you can sell the vehicle at any time as long as you continue to make the agreed repayments.
  • Guarantor loans – with this form of finance, a friend or family member can agree to make the repayments on your behalf if you're struggling. This option is usually suggested to those with poor credit ratings.

Other ways to finance your car include

  • Personal contract purchase (PCP) – similar to HP, this allows you to hire the car and pay off the loan in monthly instalments (usually over 24-36 months). At the end of the agreement, you can either hand the car back or pay a lump sum to keep it.
  • Leasing – essentially a long-term rental agreement, usually only available to those with good credit. There is normally an upfront rental cost, followed by regular repayments over 2-3 years. The car can then be handed back at the end of the term.
Best available rate
Total repayment
Total cost of credit

Best available rate

Total repayment

Total cost of credit

Representative example:

Borrowing £7,500 over 4 years with a representative APR of 25.4%, an annual interest rate of 25.4% (Fixed) and a deposit of £0.00, the amount payable would be £239.77 per month, with a total cost of credit of £4,008.96 and a total amount payable of £11,508.96.

Rates may differ as they are dependent on individual circumstances. Subject to status.

We have access to a wide panel of lenders that offer a range of financing options to suit your financial and credit circumstances.