Car finance is becoming an increasingly popular option for buying a vehicle. But many people still wonder if borrowing gives them the freedom to buy any car they want or if it comes with limitations – and are those limitations in place to help or hinder you?
Some lenders don’t have any limits regarding car types, while others have stipulations in place to protect the consumer. And if you’re left wondering about the kind of cars available when you borrow, worry not. This guide covers the essential things need to know about which vehicles you can buy with car finance.
Can I get finance on any car?
Whether or not you can get finance on any car usually hinges on the lender. Some lenders may have specific requirements, only lending on the basis that you buy a particular type of car. Restrictions aim to protect the buyer from a potentially bad deal, rather than limit your options on the market.
The traditional lending model usually means finance comes into effect at the end of the purchase journey after you’ve found the car you want to buy. But that could mean a dealership offers you a bad deal, in the hope of raising their sales numbers for quarterly targets. With this, finance at the end of the process isn’t in your best interests.
Why it’s good to have some limits
No one wants to buy a car only to find out it’s not in great shape, needs constant fixes or, even worse, is stolen. For that reason, some lenders place restrictions on the kind of car you can get. Take Carmoola, for example. We lend finance at the start of the journey and safeguard you against certain cars.
We’ll run an HPI check to ensure that everything looks good when you enter the car registration details into our app. If anything dodgy turns up – eg, the car is older than black and white television, has done about a billion miles, was previously written off or is stolen – we won’t lend.
Instead, we’ll let you know instantly and suggest that you look to purchase a different car, one that won’t leave you regretting your decision soon after the purchase. That way, you can feel confident you’re buying a car that serves you well and doesn’t end up costing a fortune in repair bills.
What's involved with an HPI check
Lenders perform an HPI check to look at certain things when evaluating your car for finance. These checks include
- If the car is stolen – pretty self-explanatory, this one
- Has been scrapped – again, you don't want a scrapped car and no one wants to lend for one either
- Written off – a car gets written off when it's beyond repair
- Exported – has it been exported from another country?
- Mileage clocking – has someone tampered with the mileage?
- Colour changes – ok, who went to town and painted it an entirely different colour?
- Outstanding finance – buying a car that already has outstanding finance is a big no-no
- Plate changes – have the licence plates been changed?
- Previous keepers – one or two previous keeps is fine. Six or seven, not so much
- Value check – is its value genuine?
- Age check – is the car older than the original PlayStation?
- Insurance Category – if this is your first car, you're better off getting one in the lower insurance band
- MOT check – has it passed its MOT?
Are there any other lending restrictions?
Other than lending for dodgy cars, we don’t have any restrictions. So if you want an electric car, petrol or diesel, or if you’re after a hatchback, saloon or coupe in automatic or manual versions, we’re more than happy to help you get the keys.
We’re responsible for lending, taking many factors into account. Moreover, we know that buying a car is exciting, whether you’re getting a Mini Cooper or going all out for a Mercedes C Class. There are plenty of car options on the market, and we’re here to help you get the right finance for them.
What about other car financing options?
We can’t speak for the specifics of other lenders, but if you’re getting a personal loan from the bank, it’s unlikely they’ll do their due diligence on the type of car you buy. Therefore, you should be extra careful when borrowing and make sure you perform the correct checks, so you don’t end up with a dodgy car.
If you’re borrowing straight from the car brand with a personal contract purchase (PCP) or hire purchase (HP), then it’s likely you will be going for a brand new (or nearly new) car. However, these types of contracts can be quite expensive, and the car often loses a significant amount of value once it’s driven off the dealership.
Getting the right car finance
No matter which finance you take, it’s essential that you buy the right car for you. Having access to the HPI check can really support you on your car buying journey.