Used Car Finance

There are two main types of used vehicle finance to choose from - personal contract purchase and hire purchase. Both are types of secured loan, which means your vehicle acts as collateral against the loan - we’ve expanded a little bit more on these below! 

You may also wish to look into a personal loan, in order to buy a second-hand car outright. You’d then make monthly payments directly into your lender. The main drawback of a personal loan though is that because it’s unsecured, the interest rates can be higher, and you may need to have a good credit rating to be approved. 

Personal Contract Purchase (PCP) - When it comes to PCP, you’d typically pay a deposit, and then make monthly payments towards the depreciation of the vehicle. This is the difference in price between the initial cost of the car, and the estimated value at the end of the term. With a second-hand car, this may not be as high a figure as a new car, so PCP can work out to be a relatively cheap option. Once your agreement comes to an end, you can then choose to make a balloon payment, in order to buy the vehicle outright.

Hire Purchase (HP) - As with PCP, with a hire purchase agreement, you’d generally make a deposit at the start of the loan, and then make regular instalments moving forward. But rather than contributing towards the depreciation of the car, you’d be simply paying off the cost of the vehicle. So when your loan finishes, you’ll own the car.

In terms of what used cars you can take out on finance, the list is pretty much endless! As long as you go through a reputable dealer, anywhere in the UK, you should be able to apply for a vehicle loan. So whether you’re looking for a flashy sports car that’ll make all your friends jealous, or a spacious SUV for the family, we’ll do our best to put you in touch with a suitable lender. 

Tips on Buying a Used Car 

• Don’t Rush Into It: While you may want your new vehicle as soon as possible, it’s a good idea to be cautious when dealing with used cars. Make sure you’re completely happy with the car before buying, as your finance agreement is likely to be over at least a few years.
• Know Your Budget: Before purchasing a used car, it’s important to go through your budget carefully to work out what you can afford. This won’t just include the monthly instalments either - you’ll also need to factor in the running costs, such as insurance and road tax. Find out more by using our handy car finance calculator!

Check Your Credit Score: While it’s possible to get a car loan with a bad credit history, you may be able to boost your credit rating and improve the offered rates. That’s why it’s sensible to look at your credit file and see if these credit improving tips can help!