A Complete Guide to Used Car Finance

Used vehicles make up a large portion of cars financed in the UK.

According to figures from the SMMT, a total of 6,890,777 used cars were purchased in the UK in 2022. In contrast, just 1.61 million new cars were registered in that same year.

When you consider they can potentially save you thousands of pounds, it’s not hard to see why second-hand cars are in demand.🚗

What Are the Best Used Car Finance Deals in the UK?

The UK's used car market has seen a surge in attractive easy financing options catering to various preferences and budgets.

These finance deals help to make second-hand cars more accessible to a broader audience.

Let’s explore the main types of used car finance deals in the UK:

Zero Deposit Deals

Zero-deposit deals are fantastic for those who don’t have enough cash to put towards the car of their choice.

You can drive away in your chosen vehicle without putting down any initial payment.

First Time Buyer Deals

Understanding that first-time car buyers may not have a long credit history, some finance companies offer exclusive deals.

These deals tend to be aimed at younger drivers, offering discounts and no credit check finance.

Extended Warranties

Beyond the standard warranty, dealers might offer extended coverage at no extra cost. These deals provide peace of mind in case something goes wrong.

Pay Monthly Deals

Pay monthly used cars have become a go-to for those who prefer to budget their expenses over time. These are the standard deals you’ll come across when shopping for car finance.

You have three main options including Hire Purchase (HP), Personal Contract Purchase (PCP), and Personal Contract Hire (PCH).

Remember, while all these deals have their unique advantages, it's crucial to assess your financial situation and understand the terms.

Take your time to choose a deal that best fits your needs and preferences.

How Can I Find Pay Monthly Used Cars for Easy Financing?

Finding pay monthly used cars is easy, but it’s important to shop around.🛍️ Here’s some of the best places you can find monthly used car deals:

Dealership Websites: Many established dealerships list used cars available for pay monthly finance. These platforms often come with filters that allow you to set your budget, desired model, and more.

Dedicated Car Finance Websites: There are specialist websites and platforms focused on connecting buyers with suitable pay monthly car deals.

They provide a broad spectrum of options and often include calculators to estimate monthly repayments.

Visit Local Dealerships: Sometimes, the traditional method works best. Dealers can provide a hands-on look at available cars and discuss your finance options on the spot.

When searching for the best pay monthly used cars, check your eligibility. Do you need a certain credit score to get approved?

Checking your eligibility means you won’t waste time applying to deals you don’t qualify for.

How Do I Finance a Second-Hand Car?

Financing a second-hand car is a lot like financing a brand-new vehicle. Before diving in, it's essential to research the market to get an idea of the average price of the model you want to buy.

Next, take a step back and assess your budget. Understand what you can afford monthly and determine the amount you can put down as a deposit.

Once you've selected a good finance deal, the application process typically requires providing identification, proof of income, an address, and undergoing a credit check.

With all the necessary documentation and checks completed, the final step is to carefully review the terms of the agreement.

If you are happy with the terms and conditions, all that’s left is to sign the agreement.📝

Traditional car finance generally requires you to answer phone calls and fill out paperwork. However, with Carmoola, you can apply, get accepted, and receive your funds directly via our app.💸

We are the first company to offer fully online car finance, offering customers a fast and convenient service.

Quick Tip: Once you do find a car you like, it’s a good idea to carry out an HPI check.

This will give you peace of mind that the car is in good condition, isn’t stolen, and doesn’t have any outstanding finances.

Can You Get Zero Deposit Used Car Finance? 

Various lenders provide zero deposit used car finance. Direct lenders, who are always looking for ways to attract buyers, often roll out tempting zero deposit deals.

You can also these offers at dealerships. They tend to offer them during certain times of the year when they're looking to make room for new stock.

If you can prove you have good money management skills and a decent credit score, you may benefit from specialist deals.

No-deposit deals for those with good credit often come with lower interest rates and monthly repayments.

If you're considering options like PCP or PCH, remember, that they often have built-in flexibility which sometimes includes a zero-deposit deal.

However, before you go with a zero-deposit car finance deal, consider the long-term costs involved.

While no upfront payment sounds great, ensure it doesn’t lead to higher monthly costs down the line.

Going Green with Used Electric Finance

Electric is the future, and you don’t need to buy brand new to be a part of it. Second-hand electric cars come with fantastic finance options.🚘

When you choose electric car finance for a used vehicle, you're helping the environment and your wallet.

As the world shifts towards sustainable options, electric cars are becoming increasingly popular, and so are the finance options associated with them.

Whether you're looking at a zippy little electric runabout or a more spacious family-friendly model, there’s a finance plan to fit your needs.💚

Ready to jump into the world of used car finance?

Whether you're looking for an electric car, or a petrol or diesel model, Carmoola has a range of used Hire Purchase deals available.

Read more about used car finance:


FAQs About Used Car Finance Deals:

Do I Need to Run an HPI Check Before Financing a Used Car?

You don’t need to run an HPI check before financing a used car. However, it can tell you if the car has outstanding finance, has ever been stolen, or been involved in any major accidents.

Think of it as a form of protection before committing to a vehicle.

Can You Get Used Car Finance Online? Is It Safe and Convenient?

You can get used car finance online. Some lenders, like Carmoola, offer online finance options specifically for used cars. In fact, we’re the only company that currently carries out the entire process online.

As long as you're using a trusted platform with secure browsing features, it's both safe and incredibly convenient.

Can You Finance a Used Car Over 5 Years Old? Are There Restrictions?

You can insure a used car that’s over five years old. However, the specifics often depend on the lender. Some may have age restrictions on the cars they finance, primarily due to concerns about the vehicle's longevity and resale value.

How Long Should I Finance My Used Car?

This really depends on your budget and financial situation. Common terms range from 24 to 72 months.

A shorter term means higher monthly payments but can save on interest in the long run. A longer term may have more manageable monthly costs, but you'll likely pay more interest over time. Weigh up your options and see what feels right for you.