Car Loans

When you are considering buying a new or used car you should think about your car financing from the beginning. Most people find the car of their dreams and then think about the financing almost as an afterthought. With the typical household changing their car after three years the car loan industry is now very big and often over complex.

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To entice you into making a purchase, many car companies and dealers now offer interest free credit. The disadvantage to this type of financing is that most you have to pay a large percentage of the value of the car as a deposit. Most of the time this is 50% - a large amount of money to find for anyone. You could be better off taking a loan for the full value and securing a good low interest rate leaving what money you do have for other purposes, for example, reducing credit card bills.


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These are the three most common varieties of car financing:

1. Car manufacturer and dealer lending schemes

Carmakers often use the finance side of buying a car to make extra money. Many people borrow money through the dealer because of convenience. This one stop shop solution where you are trading in your old car, negotiating a good price for the car you want to buy and organising finance in one place does involve less paperwork. However, it is not always the cheapest place you can gain access to the funds you need to complete the purchase. In addition, you will not be the owner of the vehicle until you have repaid the loan in full, and the car will be repossessed if you default on the repayments.

On the whole car manufacturer schemes usually have higher interest rates than those found with regular lenders. If you are offered a deal by your garage make sure you have done your homework and got a quote from us first! Take two minutes to complete our no obligation online application and see how much you can save.

Manufacturers do sometimes offer special low rate loans as incentives to try and sell more cars, the quality of these do vary - if you can get a nought percent deal for the life of the loan then for sure this is the best option, but there are things you need to be aware of. Many special rates won't last for the entire loan term, and will revert to the usual high rates after a period of time. You also need to make sure that you check if there are any arrangement dees associated with the loan, as these can easily negate any savings offered by a low rate.

2. Personal Car Loans

Personal loans are becoming increasingly popular as more people discover it is often the cheapest way to buy a new or used car.

A car loan is most commonly classed as a secured loan, even though you do not necessarily need to be a homeowner to acquire one. This is because the loan is secured on the car you are purchasing. Personal loans tend to have lower interest rates than manufacturer schemes or hire purchase loans.

A personal loan will give you the freedom to shop around for your car, as you are not tied to a specific dealer or manufacturer, and you are in a much better negotiating position if you already have you finances organised. Complete our simple online application form and see what special deals are available to you. We have a comprehensive list of the most active companies in the car loan market.

3. Hire purchase

Hire Purchase often know as ‘HP’ was once the most popular way to buy a car, this sort of finance is becoming less popular, and in our view often has the worst terms and conditions. Effectively you are signing an agreement to hire the car from the garage until the final payment is made. Hire purchase agreements seldom have good interest rates and we would therefore recommend a personal loan instead in most cases.

Bad Credit

Lenders spend millions promoting loan products only to turn down 90 percent of those who apply. We understand that it is often difficult to get a loan with anything but a perfect credit record. Your credit record may not be perfect during all the stages in your life,and certain circumstances can often leave you with a bad credit record through no fault of your own. We can help, simply click on the online application button today and someone will contact you immediately to help.