Used Car Finance Options

New cars are a tempting proposition. They're shiny, you'd be the first owner, no mileage to worry about... but they're expensive too. And they begin losing their value from the moment you buy them. Small wonder, then, that lots of people go for used cars instead.

There are certainly lots of used cars for sale, so whatever used car you're hunting for, you can be confident of finding something suitable out there somewhere. The next task is figuring out how to pay for your ideal used car. Savings are great if you have them, but even used vehicles are expensive to buy. That's why there are plenty of car finance deals around. For lots of people, finance is the only way they can afford to buy a car to use in their everyday life.

So... what's the best way to finance a used car?

If you're thinking about buying a used car on finance, you've got two broad options to think about, to begin with:

1. You could look elsewhere for used car finance
2. You could look for finance offers that might be available from the outlet you buy the used car from

With the first option, you've only got the available finance agreements at that outlet. There could be more affordable or reasonable terms or deals available elsewhere. With the second option, you've got far more scope to find a finance agreement from an appointed representative for another finance company.

You can see that the second option means you could find something cheaper. If you're at a car showroom, you'll see lots of used car deals, but they'll all be relevant to the cars you're looking at. If you go elsewhere for a finance deal, you could then use that offer to pay for the used car you've seen.

How to find car finance for used cars

There are lots of finance companies that lend people money each day. People borrow funds for all kinds of reasons, and their next car is certainly one of the more common ones.

You'll see there are lots of different terms and agreements you may consider when looking for finance on a car. Personal contract purchase, personal contract hire, PCP finance... it's no wonder the process of seeking credit can make your head spin. We've covered some of these aspects throughout this article, so stay on this page to learn more. It could help you better understand how you might find a loan for a car online.

Top tip: Always make sure you go with a reputable company

Make sure that any lender you receive a quote from is authorised and regulated by the Financial Conduct Authority. You can check their details independently on the FCA website; don't just assume they're correct on the lender's website. It's always best to be 100% sure of your situation. Every legitimate business should have its own firm reference number.

If you use our service to find a quote for finance, you'll see we're fully registered too. We also have over 50 lenders in our network, so you'll get access to potential finance and credit offers from the comfort of your own home.

Is it possible to find 0% used car finance deals?

If you've found your perfect used car, 0% finance could be the perfect addition. But is it possible?

Most of the 0% offers you'll see are for a new car rather than a used one. There could be a chance of finding a 0% offer for your next car if it isn't new, but they're quite rare. Furthermore, you should be aware that to offer the 0% deal, the car itself usually costs more than the list price would be set at. So, you're not necessarily getting a great deal.

Understanding car finance options

There are lots of considerations relating to used car finance. UK residents should be aware of the possibilities and gain an understanding of the following terms before searching for various finance products.

Hire purchase car finance

With hire purchase, you borrow the amount you need to buy a car. You pay back the loan over several months or years, and the purchase price is divided by the number of months you're making payments for.

Personal contract purchase

Personal contract purchase is shortened to PCP in many cases. In this case, you still make monthly payments, but they're typically lower than for the hire purchase alternative mentioned above. Your final payment is larger, however, to reflect this.

That said, you can also give the car back at this point and not pay the final payment, so there is a degree of flexibility there. You should still, however, make sure you understand the difference between PCP and the hire purchase agreement.

Personal loan

You're familiar with the idea of a personal loan, we're sure. You have monthly repayments to make, spread over an agreed period. Whenever you receive a finance example, you should see how much the monthly payments could be.

This sort of loan is often unsecured, although since you're buying a car, you could consider a secured loan on the vehicle itself. This could bring down the cost for a lower total amount to repay, potentially saving you a significant amount, depending on the cost of the vehicle. You'd likely notice the difference more with a car worth more money.

Part exchange

When you part exchange a vehicle, you give the seller your current car to reduce the amount you'd pay to get another one. You don't usually get as much via this method as you would if you sold the car yourself, but for some people, it's an easier and faster route to take.

Elements to think about before you buy a car

Have you seen your perfect car? If so, there are several things you ought to do before you sort out the funds to buy it. Even if your current car is now off the road, you should go through these pointers before going any further.

Running an HPI vehicle check

This check looks at the history of the car and highlights any potentially concerning information. For instance, does the number plate match the vehicle? Is the car listed as stolen? Is there finance on the car already? The HPI check covers these and other elements that should alert you to a situation whereby you should not buy that car.

Using a finance calculator

This could help you work out how much you can afford to pay for your car purchase. Obviously, it's a good idea to factor in other expenses as well - the potential cost of having the car delivered (if applicable), servicing and maintenance costs, along with your monthly repayments. Home delivery may not apply in your case if you're thinking of picking up the car, but the other aspects such as maintenance costs will.

You're then able to see how much you could afford to make for your monthly payments. If you get a deal with a fixed percentage interest rate, you'll know the monthly payments won't change. However, with variable interest, the total amount and monthly payment could change.

Do you know your credit rating?

Your credit score could help determine the interest rate you're offered for a loan to help buy a vehicle. The better the score, the more chance there is of receiving a more competitive finance plan.

Your personal circumstances, such as your address history and your financial history, all go toward your current credit score. You should also be aware that if you apply for a car finance deal, the process of doing this reduces your score a little. That's why you shouldn't make multiple applications in a short period.

Fortunately, Loanza could help you on that score

Our search facility could help you find a competitive quotation for car finance from one of over 50 lenders in our network. Far more than the limited number offered by some other similar services.

We're not a lender, but we do have connections to many consumer credit services - some you may not be aware of. We don't perform a credit check either. You'll only go through a hard check if you apply online to one of the lenders we may present you with a quote from for finance.

As you'd expect, we're fully authorised and regulated by the Financial Conduct Authority, with a company number and full address details should you need them.

Crunching the numbers for your car finance deal

We've already covered affordability, but we should also dig deeper to learn more about various possible costs involved with any finance example. Some may charge fees while others may not, so it's important to be able to tell them apart.

Do you need to pay an initial deposit?

Different loans work in different ways. Check this bit and see whether a specific finance offer asks for a deposit for a different amount than the regular payments that could follow.

What is a representative APR?

A representative apr is the apr offered to the majority of customers by a lender (or broker). A representative example gives you a better idea of whether one loan could be better than another. It allows for comparisons that could otherwise be tricky to make. Whether you're looking at a personal contract or a straightforward personal loan, always check on this for any finance offer of credit.

Are there any fees for the loan?

Some lenders may have a fixed fee to pay for arranging the loan for your vehicle. Others may not. Check before choosing finance from a specific lender. This applies if you spot any used car finance 0% as well, as the figures can always differ. Crunching those numbers for any source of credit is always a smart idea.

Is there a final repayment to make?

Personal loans have equal payments throughout. As we've seen, though, there is a final payment to make on a PCP credit deal, assuming you wish to keep the vehicle at the end.

Come to Loanza to find out more

We're not a lender, but we could help connect you with one. Remember, we're authorised and regulated by the Financial Conduct Authority, so UK residents can always rely on our most professional service.

Use our free online service now and you could find a competitive source of credit for your next vehicle. Could you pay less too? Find out more - there is never any charge for using our service, and we could connect you with an affordable source of credit. You could compare several loans in one place, so you can see where the most realistic chance of credit could be.