Can I Buy A Used Car For Under £200 Per Month?

Do you want to buy your next car but worried about your budget? Not ready for an overwhelming spend to add to your ever-growing monthly outgoings? Maybe you can’t really stretch any further than £200 per month? 🤔 We’ve got you covered! 😀 There are so many options out there - it’s just a question of knowing where to look. Let’s find out all about the best car finance deals under 200 pounds per month. 

Car Finance Deals Under £200 Per Month

First things first: you can 100% buy your next car without paying more than £200 per month in loan repayments. Several different factors come into play to be able to find such an affordable option, and the main one is buying a used car instead of a new one. 

Used cars are an excellent choice for buyers on a budget, especially cars that are no more than two years old. Some of the cars may still have a manufacturer’s warranty, which is an awesome bonus! But what else makes it so that you can get a cheap car deal? Spoiler alert: it has something to do with the type of car finance you go for.

Finance Deals for New and Used Cars

There are so many different cars you can choose from if you don’t want to spend more than £200 per month, and most of these cars can be financed through PCP and HP deals. So, how do you get an affordable car finance deal like this? 

One of the cheapest ways to buy a car on finance is through Personal Contract Purchase (PCP). You’ll have to put down a deposit, pay a fixed monthly repayment amount, and once you get to the end of your loan, you’ll either be able to hand your car back to your lender or make a balloon payment if you want to keep the car. That’s why PCP deals are so cheap - you have to pay a lump sum at the end of your loan term if you want to own the car. 

PCP deals are usually available on all types of cars and are widely popular with used cars. 

Another great option could be a Hire Purchase agreement. While you do have to put down a deposit, this is generally only around 10% of the car’s value which could still fit your budget if you’re buying a used car.

With HP, you usually have the option to choose between one to five years to pay off the car’s value and once you’re done, you own the car. There’s no need for a balloon payment. Of course, this means that the monthly payments are a bit higher than with a PCP agreement. If ever in doubt, check out our handy car finance calculator to find out how much you can afford. 

When looking for cheap car finance deals, avoid ones that look too enticing. Be sure to check the interest rates, APRs, and other fees so you’ll know exactly what you’re paying for. A long-term car finance deal can be tempting because it spreads out the cost of your next car even further, but try not to choose one that goes longer than four to five years. 

A Few Tips for Cheap Car Loans

Get a Set of Pre-approvals

Interest rates are usually determined by the same factors across most lenders. However, there are often many differences in the way these factors are applied, so shop around before you make any decisions. 

You can ask for something called a “decision in principle”, which has no bearing on your credit score, as opposed to actually applying for car finance. That way, you’ll be able to get a formal document detailing each car finance company’s interest rates and overall Annual Percentage Rate. Plus, if you do enough research, you’ll be able to have a good estimate of how much you’ll be spending on a monthly basis. 

Apply for Car Finance Online

Ah, the internet. What a marvellous thing! You can now get a car loan without even having to leave the comfort of your home. And it’s also beneficial for your budget, too. You’ll find that online lenders operate with less overhead expense than conventional finance providers, which means they can offer cheaper loans as a result. 

Another benefit of online car finance is that it is available 24/7, so you won’t have to wait around for weeks. Yep, car finance can be cheap AND fast!

Apply for Car Finance with Carmoola

You now know that buying a car for under £200 per month is totally feasible and that with preparation and research, you can control your budget. Get an estimate of the cost of financing a car with Carmoola using our car finance calculator. 

When you’re ready to apply for car finance, all you have to do is download our app, enter your details, and verify your identity using your driving licence. We process applications online, so you don’t need to wait for phone calls or personally submit documents to us. 

Carmoola also allows you to manage your repayments and make overpayments at any time. If you have questions, don’t hesitate to ask. Reach out and talk to us! We’d love to help you! 😊