How Can I Get Car Finance With A Low APR?

Getting low APR car finance in the UK can help make the cost of owning a new vehicle much more affordable.

Options such as low APR used cars and low APR PCP and HP, can help you afford that dream car you’ve been eyeing up.👀

However, while low APR deals are available, they aren’t accessible to everyone.

If you’re interested in getting low APR finance, we’ve put together this great guide that includes everything you need to know.

From what APR means to the different types of deals available, read on to get a better understand of this popular car finance offer.😊

What Is Car Finance APR?

APR, short for Annual Percentage Rate, is a crucial factor you should consider when looking into car financing options.

It represents the total annual cost of the loan, including both the interest rate and any other fees. When you see an offer from a lender, the APR gives you an idea of what you'll pay.

A higher APR typically means your car loan costs more over time, while a low APR car finance deal can lead to considerable savings.

Exploring Low APR Car Finance Deals: How Do They Work?

Low APR car finance deals mean you'll pay less interest on the amount you borrow.

Compared to higher APR deals, you’ll pay lower monthly payments and make excellent savings over the term of the loan.

These deals are popular in the UK, yet they do come with strict eligibility criteria. For example, they are usually only available to those with a great credit score.

PCP Car Finance with Low APR

PCP, or Personal Contract Purchase, is a popular car financing option, especially when combined with low APR offers.

PCP lets you pay a deposit, followed by monthly instalments for a set period. At the end of this term, you can choose to make a final payment to own the car, return it, or exchange it for a new model.

The reduced interest with low APR PCP deals means the monthly instalments are more affordable. This lets you potentially drive away in a car that would otherwise be out of your budget.

While PCP can be an ideal option for many, it also comes with its drawbacks. You may find after comparing the two, that Hire Purchase is a better fit.

Always compare your options before choosing a type of low APR car finance.

Securing Low APR Car Finance for Used Cars

Securing low APR car finance when buying a used vehicle can make the monthly repayments much cheaper. However, before you snag a low APR deal, you’ll need to do the following:

Check your Credit Score: Most lenders only offer low APR car finance to those with a good or excellent credit score. If you have a poor score, you’ll need to take steps to improve it.

Shop Around: Always compare the different deals available from various lenders. Don’t just settle for the first low APR offer you come across.

Consider a Co-Signer: If you don’t have a good credit score and you don’t have time to improve it, consider a co-signer.

This is basically someone who can vouch for you and take over responsibility of the loan if you can’t make the repayments.

Make a Large Downpayment: If you’re willing to make a large downpayment, the lender is more likely to approve you for low APR financing.

At Carmoola, we offer a range of deals including low APR car finance. With a streamlined application process through our app, securing finance for your next vehicle has never been easier.

Comparing Fixed and Variable APR: The Two Types

There are two main types of APR in car finance including fixed and variable. Here’s a brief rundown of each option:

Fixed Rate APR

Fixed APR means the rate remains unchanged throughout the duration of the loan. Your monthly payments stay the same so there’s never any nasty surprises to worry about.

With a fixed deal, it offers predictability and peace of mind. Of course, on the flip side if the market rates drop throughout the loan period, you won’t benefit.

Variable APR

Variable APR can fluctuate based on market conditions. This could mean potential savings if the rates go down, but it could also lead to higher payments if rates increase.

It offers the possibility of paying less interest overall but it’s unpredictable and you may be hit with higher rates later.

Both options have their pros and cons and what’s right for you will depend on your financial situation, risk tolerance, and personal preference.

With Carmoola, you get access to low APR car finance deals for used cars at approved dealerships. The application is a breeze, done entirely through our user-friendly app.

We provide used car hire purchase finance to fit your budget. Join the Carmoola family today and drive away with confidence and peace of mind! 🚗😊

Read more about Car Finance APR:


FAQs About Low APR Car Finance:

Are low APR car finance deals readily available?

Low APR car finance deals are available, but they aren’t offered to everyone. Your credit rating will determine the overall rate you are offered.

How does PCP car finance relate to low APR?

PCP (Personal Contract Purchase) finance may offer low APR as an incentive, especially during promotional periods, making monthly repayments more affordable. If you only choose to lease the car throughout the period of the loan, the repayments will be lower than a HP agreement, similar to low APR deals.

Is it more attainable to get low APR car finance for used cars?

While it's possible to get low APR deals for used cars, they are more commonly offered with new cars as a promotional incentive. If you do find used low APR deals, you will typically still need a good credit score to get accepted for them.

Can you explain the difference between fixed and variable APR?

Fixed APR remains constant throughout the loan period, ensuring stable monthly payments. Variable APR can fluctuate based on external factors, potentially increasing, or decreasing monthly payments over time.

Where can I find low APR finance cars in the UK?

Various dealerships off low APR finance cars in the UK. It's essential to shop around for the best deals.