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Are you looking for your next car... or perhaps even your first? For many people, car finance could be a sensible and accessible way to help fund a car. Even second hand cars are not cheap. You may not want your dream car, or even a new car, but you may want a car you can rely on to get to work, to the shops, or to drop the kids off at school.

If you're looking for car finance deals and you're not sure where to begin, you may benefit from learning more about car finance brokers. We've compiled a guide to help you learn more about the ins and outs of car finance, and why you may consider using a finance broker to help you along the way.

What is car finance?

Car finance is a type of loan designed to help you buy a new car. There are several car finance options you may see as you begin looking around for deals.

The idea is that the car finance allows you to buy a vehicle and then repay the loan according to previously agreed terms.

Within this area, there are several ways to finance a car. We'll cover those below.

Personal loans

Personal loans may be available in varying amounts. You could secure finance of this kind if you meet the requirements laid out by certain finance providers based in the UK. You may need to specify why you want the loan, but that's often because these finance products could be used for other reasons as well.

They're versatile and may be worth checking out if you're curious to know more about the various ways you could fund your car.

Bad credit loans

There are other variations on this type of loan too, depending on your credit score. For example, you may find your credit history could influence the car finance rates you may be offered by a car finance provider. It's worth checking your credit report before looking for a car loan, so you're aware of your credit rating and can more accurately compare car finance deals if you decide to take this route.

Car loans

They're no different to regular loans - only the name indicates what they're intended for. If you complete an online application form, you may be asked to state why you're applying for this finance option. In other cases, a lender may have car loans you could use for a used car or new car, according to your wishes.

Vehicle finance variations

Another important area to look at concerns the method you might use to get a car. Let's look at some of these now. It's important to know the differences between them.

Personal contract purchase

Often seen as PCP, this option typically requires a down payment followed by monthly payments. These could be lower than those seen with hire purchase.

The final payment is often larger to reflect the lower monthly outlay. This is a purchase fee if you decide you want the car; alternatively, you could swap it for a newer one, in which case you wouldn't make that final payment to the lender. Always make sure you carefully review the details if you decide this way of buying a car might be worthwhile.

Hire purchase

HP finance could involve higher monthly repayments because there's no significant payment to make at the end of the agreed term. It's a matter of spreading the payments over the loan term, so you clear the entire debt by the end of it.

However, in this scenario, you would own the car once you make the final payment. The total cost of credit may also vary because the interest rates may be different to those seen for PCP deals. Again, check the details carefully, so you can see whether this option suits you.

Part exchange

We wanted to include this here as it does give you another route to think about if you already have a car. Choose a part exchange deal and you could get a percentage off the price of your next car.

The seller, usually a car dealership, could take your current car and reduce the price of your new car in part exchange. You may still need finance to pay for the remainder though, in which case the rest of the information in this article may still be of use to you while researching your options.

The bottom line? Always get a written quotation

Maybe you already have a reasonable idea of the sort of finance option you might go for. Some may offer a dedicated account manager while others might have plenty of accessible information online for you to read.

However, in each case, you should think about getting the facts about car finance online. If you use our free search facility, you'll see we could bring you all the most important details about a potential car loan. You're then able to consider the car finance cost, enabling you to better choose the one that most suits you.

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What is a car finance broker?

A car finance broker is not a lender - that's the most important distinction to make. Loanza is a broker not a lender, for example. We don't directly offer loans, but we could put you in touch with lenders or financial services that may offer these loans. We're in touch with a huge range of lenders, meaning that you could use our services to search for a competitive car finance offer. It certainly could make life much easier when you're ready to look around for loan possibilities.

Can you trust a credit broker?

Yes. For example, even though Loanza doesn't offer loans, we are still authorised and regulated by the Financial Conduct Authority. We have a registered office address and registration number, both of which you can independently check. We have a firm reference number too, further cementing our reliability and transparency when offering our services to you.

How might car finance work via a broker?

Obviously, you'll want to look for a car via a reputable dealer, such as a car dealership, or via a private seller. With a car loan, you could find the vehicle finance and then shop around for your dream car if you know what you want for the best. Car finance deals sourced via a broker not a lender could bring you more possibilities.

For example, you may be able to think of two or three lenders you could approach to get an idea about car finance. Compare that with the 50+ lenders in our network and you can see there may be many other finance opportunities to consider via a broker.

Why use an online car finance calculator?

Before you think about approaching a credit broker, you may find it useful to use an online calculator to work out where you are financially.

Credit checks form part of the application process for all loans. At Loanza, we don't perform any credit checks as part of our search process, so getting connected to a lender won't affect your credit score. You can evaluate your offer, and decide to not proceed (it's a no-obligation quote). If you do go ahead and proceed with the lender, they will carry our a hard credit check.

Using a calculator before you reach this stage could help you work out your monthly income - and how much of it you might be able to devote to a car payment.

Of course, the actual payment you might make each month on a loan could depend on the annual interest rate you're quoted for that loan. This in turn may depend on your credit score. Let's look at this aspect a little more closely, as it could help you understand how you might search for the best deal.

How could your credit score influence the representative APR you could get?

Let's say you have bad credit. You won't be able to get a quotation from a lender who tends to focus on those with excellent credit scores. Instead, you'll receive representative APR information and other facts from one or more lenders who specialise in helping those with bad credit.

Keep that representative APR in mind because it's there to aid you in comparing two or more loans. You'll get a far better idea of which one may suit you and offer a more competitive and reasonable offer.

Is there such a thing as the best deal for finance?

It's clear that you want to pay the lowest total loan amount possible, no matter what kind of car you'd like to get. You may spot a lender who has won car finance awards in the past, but while that may seem promising in terms of their track record, it may not make them the best source of a loan for you.

The ideal approach is to try and get a competitive loan based on your credit rating. And Loanza could help make that task easier for you.

With our convenient online search form, you could fill in your details and wait just a few moments to receive your search results. As a credit broker with connections to multiple lenders (over 50 at the last count!), we're ideally placed to help you see what's available on the market today.

Whether you have bad credit or a much higher score, you could soon find and consider one or more results via our free service. And you're always in total control, so if you decide not to go ahead, there's no need to.

Looking for car finance?

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What about fees?

In some cases, lenders may arrange a loan for either a fixed fee or at no charge. However, in some cases, you may pay commission to the lender to arrange the loan.

In every case, however, you should find you can get a clear breakdown of any charges or fees involved with a specific source of finance. A representative example or representative APR is another example of this.

Only by having all the available fees or costs involved with each loan option can you work out which one could be most appropriate for you just now.

You could connect with trusted lenders with our help

Even if you've never used a broker before, you'll see there are a few factors that could be to your advantage when looking for a car finance broker UK.

You know that Loanza is authorised and regulated by the Financial Conduct Authority. We could bring you quotes from one or more of the 50+ lenders in our network. One of those quotes could help you finance a car.

You won't need to worry about contacting an account manager either. Everything is done online here, as we bring you potential car loan and finance possibilities to consider at the beginning of your search. You're then able to decide whether to proceed with any of the offers you may receive.

If you're not sure what to do for the best, car finance deals could be simpler to find via our convenient online form. Whether you're looking for classic car finance, car finance, or even van finance, you could find out more with our assistance today.