Buying Your Next Car with Car Finance
From buying new cars to finding a great second-hand one, there are many things to consider when buying your next vehicle. And if you're thinking of doing it with car finance, you probably have even more queries. With that in mind, we've put this comprehensive guide together detailing the many aspects of car finance, from how much you need per month to buy a car to what happens with outstanding finance and more. Read on below.
Is car finance a good way to buy a car?
For many drivers, using car finance is a great way to buy a car. That's because it offers different options (hire purchase, contract hire purchase, lease, loan), provides more flexibly, allows you yo build your credit score and generally gives you access to a wider range of available vehicles. As long as you can comfortably afford the monthly repayments, buying a vehicle with finance can be beneficial and help you get the car you really want.
How can I buy a used car on finance?
Buying a car on finance requires you to apply with the lender for the amount needed. You'll also need to find the car you'd like to purchase, which you can do online with websites like Auto Trader and Cazoo. Most drivers then go and see the car in person, although more options are available now that allow you to buy the car online. When it comes to finance, you have several options: personal contract hire (PCP), hire purchase (HP) and a loan directly from the lender. The option you choose will largely come down to what's best for you and how much you need to finance the car.
Does everyone get a loan to buy their car?
Not everyone gets a loan to buy their car, and if you've got money to spare you might decide to purchase the vehicle with cash. But for most people, the affordable – and often smartest – way to buy their next car is with some form of car financing, such as getting a loan. A loan can help you buy the car outright, making payments to the lender directly once you've bought the vehicle.
Can I buy a car for under £300 per month?
There are plenty of car finance deals available where you'll pay £300 or less per month. If you have a high credit score, you'll likely be able to access lower interest rates, meaning monthly repayments will be lower and possibly even under £300 depending on the deposit you put down and the type of car you'd like to buy.
Can I buy a car for under £250 per month?
You can find car finance deals where the monthly cost is £250 or under. Essentially, the amount you pay boils down to your credit score (the higher the score, the lower the interest rate), deposit amount and the type of car you want. A second-hand car will cost less per month than a brand new one of the same model, for example.
Can I buy a car for under £200 per month?
Buying a used car can be a great way to get your next vehicle for less, and there are even some options where you'll pay just £200 per month for your motor. Many of the used cars in the UK for sale are no more than two years old, either. That means you can get a high-quality car while paying less if you find the right deal.
Can I buy a car for under £150 per month?
It's not impossible to buy a car on finance and only pay £150 per month. How much you pay largely depends on the type of car you get, the interest rate on the finance and how much deposit you pay. These factors contribute to the monthly sum due each month.
What happens if I buy a car with outstanding finance?
Most types of car finance have processes in place so it's impossible to purchase a vehicle that still owes finance. Yet, there are some scenarios where you could end up buying a car with outstanding finance. This is especially true if you're buying a vehicle from a private seller who is trying to sell a car they still owe money on. If this happens to you, all is not lost. You can make use of the "good title" act, which gives you the right to keep the car. However, you may still run into issues, as the original lender may try and recover their money. Therefore, you should keep proof of all correspondence when buying the car. More importantly, you should perform a history check before purchasing the car so you can find out if it has any outstanding finance.
Can I buy a car with buy now pay later?
Buy now pay later is one of the newer forms of finance to gain popularity. It sees consumers borrowing an amount upfront and paying it back over several instalments, usually in four batches. However, the sums involved with buy now pay later tend to be on the lower scale and not the kind of prices you associate with buying a car. There are some options for buying a car with buy now pay later, but the interest rates are usually on the high side.
Can I buy a car on finance for my son or daughter?
As a parent, you might decide to buy a car for your son or daughter, especially if it's their first vehicle. While there's nothing to stop you buying the car, you wouldn't be able to finance it in their name. Instead, the finance would need to be in your name and you name them as insured drivers. Or you have the option of buying the car outright and gifting it to your child. Alternatively, you can take a joint loan under both your names or act as a guarantor for them, with their name on the loan.