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Car Finance Expert Q&A

Hi, I'm Edwin and I'm here to help you!
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Edwin Miles. Underwriting Manager

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Car Finance vs Bank Loan

Hi Edwin, i hope you're well. I've come across your site and am after some expert advice. Hopefully you can assist. I'm after a newish car in the next month or so and wanted to know the difference between a bank loan and car finance. What are the main differences? I have a decent credit record, job an income. I also have an approx 10% deposit. Lastly, what rates can you offer roughly? Regards, Jim

Posted by Jimmy Tate on

Answer.

Hi Jimmy, thank you for your questions.
Firstly, the main difference between a bank loan and car finance is that a bank loan is classed as a personal loan so is not secured against the "asset" - in this case the car. In most cases, car finance is mostly offered in the form of a 'Hire Purchase' and the loan is secured against the car until all payments have been made. Once all payments have been made, the car then belongs to you. If you stop making payments the finance company has the right to come and repossess the car.
We can, however, offer personal loan options too, which is just like what you would be offered from a bank (loan would not be secured against the car).
Have you applied yet at your bank? If so, what has been the outcome? I'm pretty confident that we could find the right product and rate that meets your circumstances as you say you have a good credit record, income and deposit amount. Please apply as and when you feel ready and I hope I've helped a little. Edwin

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