What Are the Car Finance Deals Can You Get in the UK?

Paying for a car with finance means you can spread the costs and even get something a little flashier than if you were to purchase the vehicle outright. But when it comes to car finance, how do you find the best deals so you're not overpaying? Here, we look at what you need to know about the best car finance deals in the UK. 

What Are the Different Types of Car Finance?

Whether you're a new driver or of pensionable age, (yes there is no upper age limit to getting car finance), understanding the different car finance options available when buying a vehicle will come in handy. So, let's dive in and explore the different types so you know what's what in the world of buying a car with finance and look at the right deal for you! 

First Up, We Have the Good Old Fashioned Hire-Purchase (HP) Agreement. 

With HP, you pay an initial deposit and then make fixed monthly payments over an agreed period of time. Once all the payments have been made, the car is yours to keep. This option is great if you want to own the vehicle at the end of the agreement, and it's also a popular choice for people with a good credit history.

Next, It's Onto Personal Contract Purchase (PCP) Agreements. 

PCP is similar to HP but with a few key differences. You'll also pay an initial deposit and fixed monthly payments, but at the end of the agreement, you can either keep the car by paying a final "balloon" payment or return it and walk away.

Did Someone Say Personal Loans?

A personal loan sees you borrow a lump sum of money from a lender and pay it back over the agreed period. It's a great option if you want to pay for the cost of a car upfront and is particularly helpful for second-hand vehicles, which account for a whopping 82% of the car market. These loans are usually unsecured so you will need a really good credit score to get your hands on one! 

Lastly, we have Leasing

This is where you pay a monthly fee to use the car, but you don't own it. Leasing is a smart option if you want to drive a brand new car but prefer not to worry about maintenance and repair costs and are happy to give the keys back at the end of the term, no fuss, no muss.

What is a Good Car Finance Deal? 

Finding the right car finance deal can be tricky if you're new to the game. What does a good car finance deal even look like? First of all, you want to ensure the interest rate is as low as possible. This will ensure that you're not paying through the roof in interest charges and that your monthly payments remain at a price you're comfortable with. 

You should also check the length of the agreement. A shorter agreement generally has higher monthly payments, but you'll own the car sooner. A longer agreement has lower monthly payments, but you'll be paying for the vehicle for longer. Find a balance that works for you.

There's also the deposit if you need one: a higher deposit reduces your monthly payments, but it's not always easy to save up a large sum of money upfront. 

Where Can I Get a Car Finance Deal?

You can get car finance at the dealership, negotiating with them directly when buying a car. This is the most common way to get finance in the UK, but it's not always the most effective. Rates are often high, and you may feel pressured to sign an agreement you don't fully understand. 

For that reason, it's worth checking out online car finance providers. There are many reputable companies specialising in car finance, for new cars as well as used, and they often have great deals available. The online route is good if you want to compare rates and deals from the comfort of your own home and get finance without so much as leaving your sofa.

Other options include financing with the car manufacturer, which may be helpful if you buy a brand-new car. You can also get finance from a bank through a personal loan. This is similar to using a specialist lender, although it might take a little longer. 

What Type of Cars Can I Buy With Car Finance?

Buying a car is an exciting experience, and with car finance there are more possibilities than purchasing a vehicle outright. Finance essentially allows you to buy all sorts of cars, from new models to second-hand vehicles. Like the look of that Mercedes A-Class? Car finance can help. Looking for a zippy Fiat 500? There's a car finance deal to fund it.

Car Finance With Carmoola

Carmoola is changing how people get car finance, making buying your next set of wheels easier. After downloading the app, you can get your budget in a matter of minutes. Then all you need to do is fill in a few details about the car you want and prove your identity. If accepted, you'll receive a virtual card that can be used at dealerships or online. It couldn't be easier, and it's faster than 0-60mph in your favourite supercar (ok, it's not that fast, but it's still pretty impressive). 

Car Finance. It's a Deal! 

With these tips, you can finance your dream car with confidence. So go forth and find that new set of wheels that'll turn heads when you're on the road. And do it safe in the knowledge that you found a great car finance deal to fund your motor purchase. 👍🚘