Car Finance Options Archives

PCP vs HP vs Leasing: Which Car Finance Option Is Right for You?

If you’re thinking about getting a new car, chances are you’ve come across the terms PCP, HP and leasing. These are the three most common ways to finance a car in the UK. And while they might sound similar, they work in very different ways.

From ownership and monthly costs to flexibility and mileage limits, each option has its pros and cons. With so many choices, it’s no wonder drivers often struggle to decide which is best for their lifestyle and budget.

This guide breaks down exactly how the three options work, so you can make an informed decision between PCP vs HP vs leasing. We’ll also show how My Car Credit can help you find the right finance deal, whichever route you choose.

Understanding the three main car finance types

Before comparing them in detail, it’s useful to understand the basic principles of each finance type.

PCP (personal contract purchase) – You pay a deposit, followed by monthly payments that cover the car’s depreciation, not its full value. At the end, you can either pay a final “balloon” payment to own the car, return it or trade it in for a new one.
HP (hire purchase) – Similarly, you’ll pay a deposit and then monthly instalments. But these instalments gradually pay off the total cost of the car. Once the last payment is made, you own it outright.
Leasing (personal contract hire) – You essentially rent the car for a set period (typically 2-4 years). You’ll pay an initial rental fee followed by fixed monthly payments, then return the car at the end. There’s no option to buy it.

It’s worth noting that PCP and HP are forms of car finance, meaning you’re borrowing money to fund a purchase, whereas leasing is technically a rental agreement.

How does PCP work?

A personal contract purchase (PCP) is one of the most popular car finance options in the UK because it offers flexibility and relatively low monthly payments.

How PCP works

Deposit – You usually pay around 10% of the car’s price upfront.
Monthly payments – You make fixed payments over a term (usually 2-4 years), covering the car’s depreciation rather than its total cost.
Optional final payment – At the end of the agreement, you can:

Pay the Guaranteed Future Value (GFV) or “balloon payment” to own the car outright.
Return the car to the finance company (as long as it’s within mileage and condition limits).
Trade it in as a deposit on a new PCP deal.

Advantages of PCP

Lower monthly payments compared to HP because you’re not repaying the entire cost of the vehicle.
Flexibility at the end of the term. You can keep, return or upgrade the car.
Access to newer cars more often, keeping you in warranty and up to date with the latest technology.

Disadvantages of PCP

Mileage limits usually apply. Exceeding them can lead to additional charges.
You don’t own the car unless you make the final balloon payment.
Extra fees may apply if the car is returned with damage or excessive wear.

Ideal for: Drivers who like changing cars every few years and want flexibility without committing to long-term ownership.

How does HP work?

A hire purchase (HP) agreement is one of the simplest and most straightforward car finance options available.

How HP works

Deposit – Typically around 10% of the car’s price.
Monthly payments – You repay the full value of the car, plus interest, over an agreed period (usually 2-5 years).
Ownership – After the final payment, you automatically own the car.

Advantages of HP

You own the car once all payments are made. There’s no large balloon payment at the end.
No mileage restrictions, since ownership is the goal.
Simpler terms, which are easy to understand and manage.
Flexible finance duration to suit your budget.

Disadvantages of HP

Higher monthly payments compared to PCP or leasing, since you’re financing the full cost.
Less flexibility as you’re tied in until you’ve paid off the agreement.
Depreciation is greater. Once owned, the car’s value will naturally decrease over time.

Ideal for: Drivers who plan to keep their car long-term and value ownership over flexibility, such as families or those who don’t frequently upgrade their vehicles.

How does leasing work?

Also known as personal contract hire (PCH), leasing differs from PCP and HP because you’re not buying the car. Instead, you’re renting it for a fixed period.

How leasing works

Initial rental fee – Usually equivalent to 3-6 months of payments upfront.
Monthly payments – Fixed payments for the agreed term, often 2-4 years.
Return the car – At the end, you hand the car back. There’s no option to buy.

Advantages of leasing

Drive a brand-new car every few years without any hassle.
Lower upfront cost than HP or PCP.
Fixed monthly payments make budgeting simple.
Maintenance packages often included for convenience.
No need to worry about resale value or depreciation.

Disadvantages of leasing

No ownership, regardless of how long you lease your car.
Strict mileage limits. Exceeding them leads to extra charges.
Early termination can be costly or difficult.
Wear and tear penalties may apply when returning the car.

Ideal for: Drivers who want a new car every few years, prioritise convenience and low monthly costs, and don’t care about ownership.

PCP vs HP vs leasing: Side-by-side comparison

Feature	PCP	HP	Leasing (PCH)
Ownership	Optional (after final payment)	Yes (after final payment)	No
Monthly payments	Lower	Higher	Usually lowest
Deposit	Around 10%	Around 10%	Typically 3-6 months upfront
Mileage limits	Yes	No	Yes
Maintenance	Not included	Not included	Often included
Early termination	Possible (fees apply)	Possible	Difficult / costly
Flexibility	High	Moderate	Low

Quick takeaway:

Want ownership? Go for HP.
Want flexibility and choice? PCP might suit you best.
Want convenience and low hassle? Leasing is ideal.

PCP vs HP vs leasing: Which is best for you?

There’s no single “best” option. It depends on your priorities, driving habits and financial goals. Here’s a quick guide to help match the right option to your lifestyle.

Best for flexibility: PCP

If you like the idea of changing cars regularly and want options at the end of the deal, PCP offers a mix of flexibility and affordability.

Example: Sarah is a commuter who loves driving newer models every few years. She chooses PCP so she can easily upgrade without worrying about selling her old car.

Best for ownership: HP

If you want to own your car outright after paying it off, HP is the clear winner. It’s ideal for those who see their car as a long-term investment.

Example: Mark is a family driver. He opts for HP because he plans to keep his car for many years and doesn’t want mileage restrictions.

Best for low monthly cost & convenience: Leasing

Leasing suits anyone who prioritises low upfront costs and zero ownership responsibilities. It’s popular among professionals and business users.

Example: Emma is a city-based freelancer who prefers leasing for predictable payments, included maintenance and the ability to upgrade every few years.

Still not sure? My Car Credit helps match drivers with a suitable option for their needs. Just get in touch.

Key things to consider before choosing a finance option

Above all, choosing between PCP, HP and leasing depends on what matters most to you. Is it ownership, flexibility or affordability?

Choose HP if you want to own your car outright and avoid mileage limits.
Choose PCP if you want flexibility and like changing cars regularly.
Choose leasing if you want the lowest hassle and fixed costs for a brand-new car every few years.

Before deciding between PCP, HP or leasing, think about these key factors:

1. How long do you plan to keep the car?

If you like to switch cars frequently, PCP or leasing makes more sense.
If you’re happy to keep one car long-term, HP may be more cost-effective.

2. How much do you drive?

PCP and leasing agreements typically include mileage limits. Exceeding them can cost extra.
HP has no mileage restrictions, meaning it’s great for high-mileage drivers.

This is one of our 6 Things to Check Before Signing a Car Finance Agreement

3. What’s your budget?

Leasing and PCP usually have lower monthly payments, but you’ll never own the car unless you pay extra with PCP.
HP has higher payments, but you’ll own a valuable asset at the end.

4. How important is ownership to you?

If owning a car matters, HP (or PCP with final payment) is the way to go.
If you value driving new cars and avoiding depreciation, leasing is more convenient.

To find out more, check out Who Is the Legal Owner of a Car on Finance?

5. What’s your credit situation?

All three options involve credit checks.
PCP and HP are forms of finance, so approval depends on your credit profile.
Leasing companies also perform checks, though requirements may vary.

Why choose My Car Credit for your car finance?

Even with our handy guide, choosing between PCP, HP and leasing can be overwhelming. That’s where My Car Credit can help.

As part of the UK’s largest motor finance network, we work with a panel of trusted lenders to find competitive, transparent car finance options that fit your circumstances. Here’s what you’ll benefit from:

Access to multiple lenders for a wide range of PCP and HP deals.
Transparent quotes with no hidden fees or jargon.
Quick, online application process with a soft credit search initially (so your score isn’t affected). Lenders may perform a hard credit search when your application is processed.
Personalised support from a friendly UK-based team.
Expert guidance on whether PCP, HP or leasing is best for you.

Whether you want flexibility, ownership or simplicity, My Car Credit helps match you with the right deal. So, you can hit the road with confidence.

Get your free quote online today. It only takes a few minutes.

PCP vs HP vs leasing: FAQs

Is leasing cheaper than PCP or HP?

Monthly payments are often lower with leasing, but you’ll never own the car. PCP can also offer low payments, though there’s an optional final payment if you want to buy.

Can I buy the car after a lease ends?

No, leasing (PCH) doesn’t offer a purchase option. If you want the choice to buy, PCP is more suitable.

Which is better for bad credit: PCP or HP?

HP is often easier to get approved for with a lower credit score, as the lender has security in the car. PCP might require stronger credit due to the balloon payment.

Do PCP or HP agreements include insurance?

No, you’ll need to arrange your own insurance. Some dealers may offer packages, but it’s usually separate.

Can I end a PCP, HP or lease early?

Yes, but fees apply. With PCP or HP, you can voluntarily terminate after repaying 50% of the total amount owed in most cases. Ending your lease early can be more expensive and restrictive.

Does leasing affect my credit score?

Like other finance agreements, leasing involves a credit check, and missed payments could affect your credit rating. However, managing it well can help build your score.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

Car on Finance Written Off: What Happens?

Car keys and a miniature car placed on a calculator, symbolising car finance, loan calculation, or vehicle budgeting.

Accidents happen – but if your car on finance is written off, you’ll need to take immediate steps to ensure that all relevant parties are informed. These parties include your insurer, the lender and the DVLA.

If you’ve written off a financed car, you must keep paying your finance until the settlement is resolved. Failure to do so will impact your credit score and may ultimately lead to repossession or legal action.

Typically, if your insurer determines your car to be a write-off, their payout will go to the lender rather than direct to you. However, if the insurance payout doesn’t cover the outstanding balance that remains on your finance agreement, you may still owe your finance lender money.

Below, we’ll outline what happens if you crash a financed car, giving you detailed next steps and advice.

What does ‘written off’ mean for a car on finance?

If an insurer determines that a car is ‘written off’, they’ve decided that the vehicle is either damaged beyond repair, or that any repairs will cost more than the car’s total value. The term used by insurers is ‘beyond economical repair’ (BER).

Insurers have four write-off categories:

Category A – The car is so badly damaged that its parts are only fit for purpose as scrap (non-repairable).
Category B – The car’s body has significant damage, but there are salvageable parts that can be used as spares for other vehicles.
Category S (formerly Category C) – The car has suffered structural damage that makes it unsafe to drive until professional repairs are made.
Category N (formerly Category D) – The car is structurally sound with either some cosmetic or electrical damage, or non-structural damage to the steering or brakes that might make the car undriveable until repairs are made.

When you make an insurance claim for a damaged car, your insurer will use these four categories to determine whether or not your vehicle is written off. This categorisation will then dictate how much your insurer will pay out for the damage.

Who owns a car on finance if it’s written off?

The owner of a financed vehicle that’s been written off depends on the finance agreement:

HP finance – The lender owns the car until final payment is made
PCP finance – The lender owns the car until a balloon payment is made
Personal loan – You own the car outright because a lender only finances the purchase

What happens if you crash a car on finance with insurance?

If you’ve got an insured car on finance that’s been written off, you need to let your insurer, lender and the DVLA know as soon as possible.

The insurer will use the four categories above to determine the degree of vehicular damage. This damage will then inform the settlement price your insurer will offer.

The settlement fee is the amount that your insurance company is prepared to pay you for the car. If you think that the total is too low because you think the car is worth more than your insurer is offering, you can challenge it. Just be aware that this will slow down the process and delay your receipt of the payout.

If you accept the settlement fee and are the outright owner of the written-off vehicle, the insurer will make the payout to you. However, if you’re using a financed car, the insurer will typically make this payout direct to the lender.

If your insurer’s payout covers your outstanding car finance balance, your finance is cleared.

If the insurer’s payout is less than your finance balance, however, you need to make up the difference.

GAP (Guaranteed Asset Protection) insurance can act as a safeguard in these kinds of instances. In cases where your insurer’s payout is less than the outstanding amount you owe to your car finance lender, GAP insurance can cover the shortfall.

	Insurer payout covers outstanding car finance balance	Insurer payout is less than outstanding car finance balance
With GAP insurance	No outstanding payments	GAP insurance covers this shortfall
Without GAP insurance	No outstanding payments	You are responsible for making up the difference, and will face a fee

What happens if you crash a financed car without insurance?

If you have a car on finance that’s written off and is not insured, you are liable for the outstanding balance on your finance agreement. Obviously, insurance is a legal requirement, but you may only have third-party or third-party, fire and theft insurance.

Without the insurance payout, you’ll be paying for this outstanding balance from your own pocket.

If you don’t make all necessary payments, you’ll face possible repossession of the vehicle or even legal action.

Having comprehensive insurance for a financed vehicle is a way to avoid facing high fees in case of accidents or vehicle damage.

What if the accident wasn’t my fault?

In instances where a car on finance is written off and you are not at fault, the other driver’s insurance should cover the payout.

You are still responsible for liaising with your lender until the balance on your account is fully settled.

Do you still have to pay finance after a write-off?

Until your car finance lender receives the insurer’s payout and confirms settlement, you are legally responsible for making your monthly finance repayments.

A car finance contract is a legally binding agreement, meaning the lender is owed in full, even if your vehicle is undergoing repair following damage.

If you don’t make your monthly payments, it will impact your credit score, and you may face further legal repercussions.

In some cases, your insurer’s payout may not make up the total outstanding balance that remains on your car finance. In these cases, you’ll be responsible for making up the shortfall, unless you have GAP insurance.

What is GAP insurance and how does it help?

If your insurer’s payout is less than the outstanding balance on your auto finance agreement, GAP insurance can make up the remaining cost so that you don’t go out of pocket.

For example, if your total finance balance is £12,000 and your insurance payout is £10,000, you’ll have a £2,000 shortfall. If you’ve got GAP insurance, this will make up the outstanding balance. Without it, you’ll be expected to pay the two grand yourself.

Be aware that GAP insurance isn’t offered as standard. As such, if you’re looking to insure a car on finance and are concerned about your options in case of accidents, speak to your insurance company about GAP insurance. It’s especially useful in the first two to three years of car ownership.

Step-by-step: what to do if your financed car is written off?

If your car on finance is written off, take the following steps:

Take photos of the damage and the numbers and car registration of all involved parties. Keep a note of other important information regarding the accident.
Inform your insurance provider
Notify your finance company
Wait for insurer valuation and settlement offer
Check outstanding finance balance vs. valuation of payout
Consider GAP insurance (if active)
Resolve any shortfall, if necessary

Moving forward after a car write-off

When your car on finance is written off, it can feel stressful. But with insurance and finance support, it’s more than possible to find a manageable way to move forward after a car write-off.

My Car Credit can help drivers like you find affordable auto finance for a replacement vehicle. Alternatively, if you’re looking for your next drive after fully paying off your previous motor finance agreement, use our car finance calculator to work out the kind of deal that might be most suitable for you.

FAQs about what happens if you crash a car on finance

What happens if I crash a financed car and it’s my fault?

If you crash a financed car and are at fault, you need to inform your insurer. They’ll assess the scale of damage and determine any payout. You’ll need to keep making your monthly finance payments and inform your lender about the crash and any liaison with your insurer.

What if my financed car is written off and I still owe money?

If your financed car is written off and you have outstanding finance to pay, you’re legally liable to repay this in full. Your insurer will offer a payout based on the degree of vehicular damage. This payout is then put towards your outstanding finance balance. You’ll need to make up any shortfall yourself, unless you have GAP insurance.

Can I get another car on finance after a write-off?

It’s possible to get another car on finance after a previous write-off, provided you repaid the outstanding finance on your previous vehicle in full. Failure to make up this outstanding balance on a financed car will impact your credit score and may affect your eligibility for future loans.

What if my car on finance with a provisional licence is written off?

If your financed car with a provisional licence is written off, you need to follow the same protocol for a fully licenced, financed car. Inform your insurer, finance lender and the DVLA, and wait for your insurer to confirm their payout to determine your next steps.

Will a write-off affect my credit score?

A car write-off won’t automatically impact your credit score. However, if you fail to make your monthly repayments or don’t make up the outstanding balance on your finance agreement, your credit score will be negatively affected.

Can I transfer my finance to another car?

You cannot swap a car finance agreement from one vehicle to another. You’ll have to make up any outstanding finance on your existing agreement before taking out a new one. Provided you’ve paid off 50% of the total amount you owe, you may be able to opt for voluntary termination.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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What is a Guarantor Loan?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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5 Benefits of Using a Car Finance Broker in the UK

Person signing car finance documents at a desk with a red toy car, calculator, and laptop.

Once upon a time, borrowers relied on brick-and-mortar banks or dealership finance to fund the purchase of their next car. But in today’s digital-first world, car finance is undergoing a significant shift. Many UK motorists now rely on car finance brokers to help them secure the most suitable deal for their needs and circumstances.

Today’s consumer prioritises car finance terms with flexibility, better rates and a more personalised service. UK car finance brokers offer all these via a streamlined and supportive process.

So, whether you’re a first-time buyer, are self-employed, have poor credit, or you just want to get the right deal for you, car finance brokers are fast becoming the go-to choice.

This article explains what car finance brokers do, how they differ from traditional lenders, why use a car finance broker, and how they can benefit you in your search for the most appropriate car finance for your needs.

What is a car finance broker?

In essence, a car finance broker is a middleman between you (the borrower) and a range of finance lenders.

Where banks or dealerships tend to offer you a single finance deal, a car finance broker works with a panel of lenders to find the option that best fits your financial situation and vehicle preferences.

Most importantly, reputable brokers such as My Car Credit are authorised and regulated by the Financial Conduct Authority (FCA). As such, we operate with transparency, professionalism and fairness, so you can feel confident that you’re in safe hands.

Brokers vs. lenders: know the difference

There are key differences between brokers and lenders.

Lenders are financial institutions, including banks and credit unions. They offer their own set of finance products. If you go directly to a lender, you’ll face limited choice based on what kinds of finance that one organisation can provide. What’s more, if you don’t fit the lender’s criteria, you might get rejected or be offered a deal that’s not suitable.

On the other hand, brokers work with multiple lenders. They act on your behalf to compare options, assess your eligibility and present you with the most suitable deals from across the market. This broader reach can result in more competitive rates, flexible terms and better outcomes – especially for applicants with unique financial circumstances.

Using a car finance broker is much like using a travel comparison site. Instead of calling multiple airlines, you enter your details once and get a range of suitable flight options. Brokers do the same for car finance, but with far more guidance and support.

While dealership finance might seem convenient, it can sometimes be more expensive. The rates offered are often fixed and may include commission-based markups. Brokers offer clarity, impartial advice and a better chance at finding a deal that suits your individual needs.

Unlock finance options dealers can’t always match

A major benefit of using a car finance broker is their ability to connect you with finance options that just aren’t available elsewhere. Why use a car finance broker? With a car finance broker, you can benefit from access to specialist lenders—institutions that cater to people with bad credit, those who are self-employed, and applicants with no deposit.

Car finance brokers can also give you better access to flexible repayment terms that can be adjusted based on your credit profile, income and lifestyle.

Plus, you may also benefit from lower APRs with a car finance broker. Some of the most competitive or flexible finance products are broker-only, so you won’t find them directly advertised to the public or through car dealers.

Whether you’re after a new or used car, a broker’s panel of lenders increases your chances of securing an affordable, tailored finance solution.

Why Use a Car Finance Broker – Top Benefits

Wider choice of lenders

Car finance brokers work with a broad panel of lenders, giving you access to more finance options than you’d secure through a single dealership or bank. This increases the likelihood of securing a deal that suits your needs.

Soft credit search to start

At My Car Credit, we begin every application with a soft credit check. Because this won’t impact your credit score, you can explore your options without any risk to your financial profile.

Less paperwork, faster process

Car finance brokers streamline the application process. At My Car Credit, our process is all done digitally, ensuring speedy applications and fast approvals that reduce your stress and save you time.

Expert help and ongoing support

A car finance broker will guide your journey from start to finish. You’ll benefit from the ongoing support of someone to explain your options, answer questions and handle much of the admin, making the experience less daunting.

Better approval odds for complex applications

At My Car Credit, we accept individuals with a range of circumstances and profiles. Whether you have bad credit, an irregular income or alternative needs, we know which lenders are more likely to accept your application. This targeted approach can greatly improve your chances of getting approved.

All of these benefits add up to help answer the common question – “why use a car finance broker”. They offer more choice, expert guidance, and a smoother journey to securing the right deal for you. Instead of going it alone, a broker can help you save time, reduce stress, and boost your chances of approval.

When should you consider using a car finance broker?

Different car finance applicants will have different needs and circumstances. If you fit into any of the following categories, you may most benefit from using a car finance broker:

First-time car buyers who are unsure of the finance process and want guidance.
People who’ve been turned down by banks or dealers, and need a second chance with tailored finance options.
Self-employed or freelance workers whose income doesn’t fit traditional lending criteria.
Buyers looking for a hassle-free finance journey who could benefit from expert help.
Applicants comparing options before committing to dealer finance.

How the car finance broker process works

Using a car finance broker like My Car Credit is simple, efficient and online-first. It’s really as easy as one, two, three:

Apply online – you’ll complete a short online application via our form. We’ll perform an initial soft credit check to assess your eligibility without impacting your credit score, giving you a no-obligation quote.

Get matched to a lender – our system will pair you with suitable finance options based on your distinct profile.

Choose a car and drive away happily – once you’re approved for finance, you can confidently shop for a vehicle that fits your budget. With My Car Credit, you can even use our one-stop shop of quality, pre-approved vehicles to secure your car and car finance in one go.

Apply for car finance with My Car Credit

Apply for car finance with My Car Credit to take advantage of the benefits of using a car finance broker. We’re part of the UK’s largest motor finance provider, and are trusted by thousands of drivers with all types of credit profiles.

Our online application process is quick and easy to fill out, and you’ll experience the support of a real UK-based team of Car Credit Specialists throughout the process.

We’ve got car finance available for both new and used vehicles, and can help individuals with variable credit profiles, conducting an initial soft search that won’t impact your score.

Kickstart your car finance journey by using our car finance calculator, or speak to one of our friendly team today.

Common questions about car finance brokers

Do car finance brokers charge a fee?

Most reputable brokers don’t charge customers directly. Instead, they receive a commission from the lender if you take out a finance agreement. This means you can usually use a broker’s service at no cost to you.

Is using a broker safe?

Yes – especially when the broker is FCA-regulated, like My Car Credit. Regulation ensures that we adhere to strict standards and put your interests first, operating with absolute transparency.

Will using a broker hurt my credit score?

Initial car finance applications with a broker typically involve a soft credit check, which has no impact on your score. At My Car Credit, we’ll only conduct a hard credit search once you’re ready to proceed with an offer.

Do brokers work with bad credit customers?

Many brokers specialise in helping people with poor or limited credit histories. Our broad panel of lenders means that My Car Credit can connect you with lenders who understand your situation, potentially providing finance where others haven’t been able to.

Can I get finance for a used car through a broker?

Brokers offer car finance for new, nearly-new and used cars. With My Car Credit, you may be able to get pre-approval for finance, beginning your search for a vehicle that suits your approved budget.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is Hire Purchase? – Simple HP Explanation

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PCP: Is It Worth It?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apply for car finance car finance car finance application car finance calculator online car finance application

How to Avoid Common Pitfalls on Your Car Finance Application

A car loan application form with a green approved stamp on top. Sitting on top of that document is a black car key.

The car finance application process might not be as exciting as picking out your make, model and trim level. But trust us, it’s just as important.

What’s at stake?

Get it wrong, and you could face higher interest rates, unfavourable terms and in a worst-case scenario, flat-out denial of your application.

Get it right, and you can secure a deal that fits your budget, with manageable payments, fair interest rates and best of all, the coveted ‘your application has been approved’ letter.

The key to success? Avoiding online car finance application pitfalls. Whether you’re completely new to auto finance or are a bit of an old hand, here’s your definitive guide to avoiding the most common mistakes.

Know your budget before applying

Get your financial ducks in a row before starting the car finance application process. The sticker price of the car is important but don’t forget to factor in the boring bits. Extras like insurance, maintenance, fuel and repairs should all be written into your final budget. A good understanding of your overall financial picture will help you set a budget that won’t leave you eating beans on toast for the next three years.

Tools like a car finance calculator are your best mates here. In a few clicks, you can estimate how much you can borrow, what your monthly payments might look like and how different terms affect the overall cost. Why crunch your numbers now? It’s simple. So you can make sure you’re not biting off more than you can chew.

Check your credit score

Lenders don’t know you personally, so a simple “I’m good for it” won’t suffice for a car finance application. Instead, they scrutinise your credit score. This numerical reflection of your financial reliability is like a vehicle maintenance log, except for your personal finances. Things like your payment history, outstanding debts, length of credit history and new credit enquiries can all affect your credit score.

Don’t stress if your score’s less-than-perfect though, there are ways to get back on track.

Play it smart with lenders

Sending off online car finance applications to multiple lenders might seem like a good way to increase your chances of approval. The reality? Too many “hard searches” on your credit file can make you seem like a risky borrower. Stick to soft searches or pre-approval tools that let you check your eligibility without leaving a mark.

Use credit check tools

Check your credit score with tools like Experian and Equifax before you apply. These will show you what lenders see and give you a chance to tidy up any issues.

Explore options for bad credit

Credit score looking a little worse for wear? Specialist lenders, like the ones we work with at My Car Credit, offer tailored finance options for auto finance applicants with poor credit.

Consider any additional costs

Monthly payments aren’t the whole story when it comes to car finance. Forgetting about the extra costs is one of the most common mistakes – don’t let it catch you out.

Beware the balloon payment

There’s likely a balloon payment waiting at the end of your term if you’ve gone for a PCP agreement. It can be a nasty surprise if you’re not prepared. Check out our balloon payment guide for a full rundown on what this is.

Work with the experts

The easiest way to avoid car finance application roadblocks? Work with someone who knows the ropes. We lay out all the costs upfront at My Car Credit, so you know exactly what you’re signing up for. No smoke, no mirrors. Just clear, honest advice from professionals who know their stuff.

Make sure your car finance documents are in order

Nobody loves paperwork, but when it comes to car finance, it’s non-negotiable. Missing documents can bring your application to a grinding halt, even if your credit score is best-in-class.

Your essential checklist

Here’s what you’ll need to have ready for your car finance application:

ID – Passport or driver’s licence
Proof of address – Recent utility bill or bank statement.
Proof of income – Payslips or tax returns if you’re self-employed.
Bank details – For setting up payments.

How My Car Credit can help

Worried you’ll miss something? This is where we come in. At My Car Credit, we know our way around the car finance application process. We’ll guide you through the paperwork step-by-step and make sure you’ve got everything sorted before your application’s sent off. With the right preparation, there’s no reason you can’t get it right the first time.

Next steps for a smooth car finance application

With your budget set out, your credit score checked and your documents in order, you’re ready to hit send on your car finance application.

Here are a few final tips to keep things stress-free:

Stay organised

Create a folder (digital or physical) for all your car finance application documents. Having everything in one place saves time and keeps headaches at bay.

Ask for help when you need it

Confused about anything? Don’t suffer in silence. My Car Credit is just a click or call away. We’re here to answer your questions about the car finance application process and help you get it right the first time.

Use online tools

From the My Car Credit budget calculator to free online credit checks with agencies like Experian, online tools are a fantastic resource. Use them – they’re designed to make your life easier.

Getting your car finance application approved isn’t rocket science. Success is all about preparation, attention to detail and working with the right team. By knowing your budget, checking your credit score, factoring in all costs and getting your documents in order, you can give yourself the best possible shot of an ‘approved’ verdict.

Don’t forget, My Car Credit is here to help every step of the way, so fill out an online car finance application and let’s get started.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What Happens if I Can’t Pay My Balloon Payment?

I want to buy a car on finance, how much can I borrow?

Bank Loan or PCP: Which is Right for You?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apply for car finance car finance car finance application car finance calculator online car finance application

Exploring the Best Car Finance Options for Poor Credit

There’s no getting around it. Securing car finance with a low credit score can be frustrating. Almost as frustrating as tracking down a reasonably priced coffee in London or riding the Central Line at rush hour.

Our best advice? Pare back your expectations and consider buying a used car. Not only are second-hand vehicles easier on the wallet but they potentially come with lower credit score requirements due to costing less than a brand-new version of the same vehicle…

Struggling with poor credit? Plenty of Brits are in the same boat. In fact, around 20% of British adults have a poor credit score. The secret to getting around it is to understand how credit scores work and why yours is lacking.
We’ve got your back with this easy-to-read guide.

How is poor credit affecting your car finance?

Credit scores are a bit like school reports. They tell lenders how reliable you are with money. How bad does your score have to be to fall into the “poor” category?
What’s considered “poor” can vary between credit agencies:

Experian: Anything below 720 out of 999 is seen as poor.
Equifax: A score under 380 out of 700 lands you in the poor category.
TransUnion: Scores below 565 out of 710 are considered poor.

Having a score in these ranges can make lenders cautious. What does this mean for borrowers? Higher interest rates and rejections. It’s more common than you might think. The latest figures from the Money and Pensions Service (MaPS) reveal that one in five UK adults are declined for credit.

It’s a high percentage, but don’t let it discourage you. Whether you’re worried about the outcome of an application or have already been denied, understanding where you stand is the first step to getting around car finance with a low credit score.

Unpacking a poor credit score

There are a few reasons why your score might be in the doldrums. Maybe you missed a few payments, defaulted on a loan, or you’re just carrying a bit too much debt. Whatever the reason, poor credit can make getting car finance a bit trickier.

But don’t give up just yet. With the right preparation, you can still find a way to make your car finance and credit score work. Lenders will want to know you’re capable of making those monthly payments, so having your financial ducks in a row is a great place to start.

Assessing your car finance situation

Before you start shopping for a new-to-you car it’s time for a quick reality check. Ignorance isn’t bliss. Knowing your credit score is essential. You can check it online for free to get an idea of what you’re up against.

Next, take a good look at your finances. Ask yourself:

What’s your income like?
What are your locked-in monthly expenses?
What debts are you juggling?

These questions will help you figure out what you can realistically afford. car finance calculator is a great tool to help you find that sweet spot. Crunch your numbers so you’re not left with more month at the end of your money.

What can you expect from your poor credit car finance?

Higher interest rates, bigger deposits and shorter loan terms are common symptoms of poor credit. The good news? With the right strategy, you can secure the best deals for car finance with a low credit score , just like these customers did:

“Helped me all the way. So easy to do. And I’ve got a bad credit score. So it’s possible to get it through these guys. Really pleased with the help and support.” – Carl

“Very easy and quick to have me in my new car and considering I have bad credit they managed to find me a good deal. Very happy customer.” – Thomas Dudley

Improving your application

Use these tips to give your car finance and credit score application the best possible chance:
Start by saving for a bigger deposit. It shows you’re serious and can reduce the amount you need to borrow.

Next, gather proof of a steady income. Payslips, bank statements – whatever it takes to show you’re on solid ground.
Don’t go for the flashy sports car if your budget is more sensible saloon. Look for something affordable, reliable and within your means.
Got a story behind your poor credit? Maybe you lost your job or had unexpected expenses. Tell the lender. They might be more understanding than you think.

Avoiding predatory lenders

It’s easy to feel like you’ve got a target on your back when you’re looking for car finance with a low credit score. Some lenders out there specifically target individuals with low income and bad credit sare as bent as a nine-bob note, so watch out for red flags. Here are some common ones:

A lender promises guaranteed approval without looking at your finances
You’re seeing sky-high interest rates
They push you to sign paperwork quickly without giving you time to read the terms.
There are hidden fees or charges that weren’t clearly explained.
They discourage you from asking questions or getting a second opinion.

How to recognise fair vs. exploitative terms

Knowing the difference between fair and exploitative terms is a must. Fair terms are transparent and clearly state interest rates, fees and repayment conditions. There are no sneaky clauses or hidden charges. Lenders will encourage you to ask questions and take your time before signing anything.

Exploitative terms are often cloaked in jargon. Look out for excessive fees or penalties for late payments, along with aggressive sales tactics to pressure you into a quick decision.

Protect yourself and always read the fine print to make sure you understand what you’re signing up for. A reputable lender broker like My Car Credit will be transparent and supportive, not confusing and pushy.

See how our poor credit car finance can support you

At My Car Credit, we get that life doesn’t always go to plan. We’re here to help you match up your car finance and credit score, with no hidden fees or nasty surprises. Just honest advice and a straightforward signup process.

Give us a call on 01246 458 810 to find out more or email us at enquiries@mycarcredit.co.uk to see how we can help you get where you want to be – behind the wheel! You can get the ball rolling, without it impacting your credit score*, by submitting an initial application.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Small Splendour: What’s the Best Luxury Hatchback?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car buying Jan24 Lexus luxury porsche suv

What to Look for in a Car Loan Quote

Most UK drivers just don’t have the cash to pay for a car upfront.

That’s where car finance comes in. Car finance is a catch-all term referring to a type of credit agreement. With car finance, you’ll borrow a pre-agreed amount of money from a lender. You then use this cash to purchase a vehicle and pay the loan back through a series of affordable monthly repayments, plus interest.

Car finance is an affordable, accessible, and flexible way to get behind the wheel of your dream car. In this article, we’ll examine what to look for in a car loan quote.

6 things to look for in a car loan quote

When shopping around for a car loan quote, you’ll likely come across a lot of jargon. You can use our car finance jargon buster to break down the kinds of terms that you might face in your search.

APR

An abbreviation of annual percentage rate, an APR refers to the full cost of your annual borrowing for a car loan. The higher the APR, the more you’ll pay overall.

An APR differs from an interest rate because it includes all standard fees and charges, as well as any interest you’ll be expected to pay. Therefore, it gives you an indication of the true cost of your car finance.

The APR must be disclosed before an agreement is signed, so you should always check this out when shopping for a car loan quote.

Comparing the APR offered by different lenders is a good way to compare car finance deals. Remember that the representative APR advertised is a benchmark – not all borrowers will receive it, so you need to check the APR that you’re offered.

Type of finance agreement

When shopping around for a car loan quote, consider what kind of car finance might best suit you.

One of car finance’s main draws for motorists is its flexibility. Different types of car finance agreements are available to suit different drivers.

Not all finance packages will work for everyone: your unique circumstances and needs will determine the right type of car loan quote.

Remember that the length of the loan term will also impact how much you pay in interest. The longer the term, the more you’ll pay back.

Any conditions or terms of the agreement

Different drivers have different priorities, so don’t opt for a ‘one-size-fits-all’ car loan quote.

Some motorists may be happy with mileage restrictions. Others might want to own the car outright, whilst some drivers are happy with the option to own the vehicle at the end of the agreement, or even to hand it back. Alternatively, you can find agreements which don’t require a deposit. It’s also worth knowing that you can face fines with some car finance agreements if you cause undue wear and tear on the vehicle.

When you’re looking for the right car loan quote for you, be realistic about your needs and circumstances, as well as the kinds of terms that will work for you. For example, if your work requires you to make long journeys frequently, choosing a car finance agreement with mileage restrictions may not be suitable.

Poor credit car finance

If you’ve got a poor credit score, you may not be eligible for certain car loan quotes.

Look for a lender like My Car Credit. We offer poor credit car finance to drivers with less-than-perfect credit scores. We combine a wide panel of trusted lenders with a sensible approach to help you get approved for a finance agreement that works for your circumstances.

Used car finance

Purchasing a ‘new to you’ vehicle is a great way of getting on the road without forking out for the sizeable outlay of a more recent car make and model.

If you’re looking for a car loan quote for a used or nearly new vehicle, check if your lender has used car finance available.

There are plenty of options for financing a used or nearly new car, with different agreements available to suit your unique situation and preferences.

Plus, if you’re looking for both your car and car finance in one go, check out if your lender or broker can help you with both. At My Car Credit, we’ve established excellent relationships with a large number of reputable car dealers across the UK, helping you to source your next nearly new car and car finance in one go.

Reputability and size of lender

It goes without saying that you should always establish the reputation of any lender offering you a car loan quote before signing a contract.

At My Car Credit, we’re part of the UK’s largest motor finance broker, Evolution Funding. This gives us access to the largest panel of car loan companies, meaning you’re more likely to find a car finance deal that suits your circumstances.

We’ve also got a friendly and experienced team of Car Credit Specialists who can offer any advice and guidance that you need throughout the process.

Plus, we’re also the ‘Best Broker’ winner for the ninth year running at the Car Finance Awards 2024, so you know you’re in good hands.

Find a car loan quote to suit you today

My Car Credit is dedicated to helping you find the best car loan quote for your needs and circumstances.

We pride ourselves on our speedy, hassle-free online application process. With us, you’ll receive a no-obligation quote in minutes, and any rate you see is the rate you get.

Do the maths today with our free online car finance calculator and get on the road to your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Can I Give My Car Back to the Finance Company?

PCP vs HP – What’s the Difference Between Them?

Check for car finance without affecting your credit score

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance car finance calculator car finance options car loan Jan24 used car

How to Get a Car Finance Quote Online

Man with headphones getting a car finance quote online

Gone are the days when prospective buyers had to visit brick-and-mortar car dealerships to secure a car finance quote.

It’s easier than ever to find a car finance quote online that works for your unique needs and circumstances. Read on to find out how to find an online car finance quote and discover the variables you need to consider when shopping around.

How to get a car finance quote online in three steps

With My Car Credit, finding a car finance quote online can be done in three easy steps:

1. Complete an application

Use our car finance application to crunch the numbers on your next set of wheels.

We’ll ask you to enter details like your loan amount, repayment term, and credit rating, as well as providing some personal information. From there, we’ll give you an instant breakdown of your expected monthly repayments, along with the typical rate and total payable. You’ll receive a no-obligation quote in mere minutes, benefitting from an instant online decision based on the information you give us.

If you’re happy with your rate, you can hit ‘apply now’ to complete your application. With us, the rate you see is the rate you get – it’s inclusive of all fees and costs, so you won’t face any nasty surprises down the road.

Plus, our initial credit check is only ever a soft search, so it won’t impact your credit score. However please note that should you progress, some lenders may perform a hard search on your credit file.

2. Go car shopping

If you choose to advance your application, you’ll be assigned a Car Credit Specialist. Our team are friendly, experienced professionals, and they’ll be on hand to answer any concerns or queries you might have throughout the process.

Now you’ve got a sense of your budget, you can crack on with the fun part – shopping for a car! If you’re looking for advice, your assigned Car Credit Specialist will be able to help you find a perfect car from one of our trusted dealers. Alternatively, let us know if you’ve found a vehicle, and we’ll check the dealer is top notch.

3. Get behind the wheel

You sign all documents from the comfort of your own home, and we’ll coordinate any last-minute liaison between the dealer and lender. Once all parties are happy, funds are typically transferred to your dealer the next working day. You can then collect your car keys and take to the road in your new to you, or used vehicle.

Factors to consider when searching for a car finance quote online

With My Car Credit, securing a car finance quote online is a stress-free process achieved in three easy steps. That said, there are a number of things to keep in mind when you’re shopping around for a quote.

Type of finance agreement

The right kind of car finance agreement for one driver might not be the best agreement for another. Understanding the difference between alternative car finance agreements means you’re more likely to find one that accommodates your unique needs and circumstances.

At My Car Credit, we appreciate that no two drivers are the same. Some motorists may want to pay a sizeable deposit to lower their overall monthly repayments. Alternatively, other drivers may want to pay back more affordable monthly instalments and have the option of returning the car at the agreement’s end.

We pride ourselves on the flexibility, accessibility, and affordability of our car finance agreements, and can help you find the right deal for your priorities.

Terms of finance agreement

It’s worth paying attention to the terms of a finance agreement in order to establish the right one for you.

Drivers looking to own their car at the end of their finance agreement might not benefit from the same terms as drivers looking to hand the vehicle back. Equally, whilst some motorists are happy facing mileage limitations, others need the flexibility of minimal restrictions.

Determine your priorities before shopping around for your car loan quote online to ensure you secure the best finance agreement for your needs.

Credit checks

If you’re a driver with a less-than-perfect credit score, you may feel like car finance won’t be made available to you.

In fact, My Car Credit offers poor credit car finance designed specifically for applicants with less-than-ideal credit ratings.

We consider all circumstances and will look at each case individually and without judgement. Our initial credit check is also only a soft search, but please note that should you progress, some lenders may perform a hard search on your credit file.

Plus, because we combine a wide panel of trusted lenders with a sensible approach, we’ll help you find the most appropriate car finance lender for your circumstances. As such, we may be able to approve you for car finance where others haven’t.

What’s more, by making your monthly repayments in full and according to schedule, you’ll be building up your overall credit rating. This could potentially make you a more attractive candidate for future loans.

Securing a vehicle and finance agreement in one

If you’re a fan of multi-tasking, you may want to secure both your car and online car finance quote in one.

My Car Credit has established excellent relationships with a large number of reputable car dealers across the UK. We’ve got a reliable pool of trusted dealers who can help you source your next used car and car finance agreement in one go!

Get a car finance quote online with My Car Credit

With the largest panel of car finance lenders out of any UK broker, My Car Credit will help you get a car finance quote online that works for your needs and circumstances.

Use our online car finance calculator to kickstart your application today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Much Car Finance Do I Qualify For?

Check for car finance without affecting your credit score

How to Strengthen Your Eligibility for Car Finance

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance calculator car finance options car loan Jan24 online quote

How Much is a Deposit for a Car?

When you’re ready to buy a new set of wheels, whether it’s brand-new Kia Sportage or a used Tesla Model 3, one of the first questions you’ll likely have is ‘how much is a deposit for a car’.

In the UK, the amount you’ll need for a car deposit can vary enormously and depends on several factors, including the type of finance agreement you choose, the price of the car, and your credit history. To make things a little clearer, let’s break down these factors to help you budget for your new ride.

Understanding car deposits

A car deposit is an initial payment made at the time of the vehicle purchase. It’s a portion of the total cost that you pay upfront and reduces the amount you’ll need to borrow through finance plans like a personal contract purchase (PCP) or hire purchase (HP). The deposit not only reduces your monthly payments but can help secure a better interest rate and terms on your agreement.

Factors influencing the size of your deposit

Now you know more about what a car deposit is, let’s take a closer look at the factors that can affect how much you’ll need to pay.

Type of finance agreement

Different finance plans require different deposit amounts.

PCP: How much is a deposit for a car with PCP? Personal contract purchase plans usually ask for anywhere between 10% and 30% of the car’s value as a deposit. The flexibility of PCP plans often means you can adjust the deposit to find a monthly payment that suits your budget.

HP: Hire purchase agreements usually require a deposit of around 10% of the vehicle’s price, though this can be higher depending on the agreement with the lender.

Personal loans: If you’re taking out a personal loan from a bank or other financial institution, the deposit might be flexible. Some lenders offer loans for the full value of the car, which could potentially reduce the deposit to zero.

Cost of the car

The answer to ‘how much is a deposit for a car’ also depends on the purchase price. Naturally, the more expensive the car, the higher the deposit. For example, a £30,000 car, at a 10% deposit rate, would mean a £3,000 upfront payment.

Your credit rating

Your credit score plays a key role in determining how much is a deposit for a car. A high credit rating establishes you as a responsible borrower and can convince lenders to reduce the deposit amount. On the flip side, a less-than-perfect credit score may prompt lenders to request a bigger deposit.

Average deposit amounts

While there’s no one-size-fits-all answer, most British motorists can expect to pay a deposit of anywhere from 10% to 30% of the total cost of the car. Here are a few scenarios:

Economy cars: For more affordable vehicles priced around £10,000, you might be looking at deposits from £1,000 to £3,000.

Mid-range cars: How much is a deposit for a car for vehicles in the mid-range market? For cars priced around £20,000, expect to pay a deposit of between £2,000 and £6,000.

High-end cars: For luxury cars or higher-spec models, which can cost upwards of £40,000, the deposit might be anywhere from £4,000 to £12,000 or more, depending on your finance deal.

Consider no deposit car finance

Most auto finance agreements start with a cash deposit however this isn’t a hard and fast rule. For some motorists, no deposit car finance can be a great way to skip the deposit and secure the keys to a new car, without parting with a large sum of cash. Whether you’re finding it hard to save for a deposit or simply want to preserve your capital for other expenses, no deposit car finance is an attractive option for many Brits.

Get behind the wheel with My Car Credit

Whether you’re looking to go down the traditional auto finance route and kickstart your agreement with a deposit, or you’d prefer to fast-track the process with a no deposit plan, we’re here to help. At My Car Credit, we’re dedicated to securing you the right deal on car finance, no matter what your budget or financial situation.

Give our online car finance calculator a try and get on the road to your dream car today!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How to Get Car Finance with Poor Credit

No Deposit Car Finance – How Does it Work?

What Happens if I Can’t Pay My Balloon Payment?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance car finance options deposit Jan24 used car

Figure Out Your Monthly Car Payment with Ease

Man driving after figuring out his monthly car payments

If you’re searching the market for a brand-new or used vehicle, you’re probably wondering how to figure out your monthly car payments. After all, with inflation and the rising cost of living, most of us are on a strict budget.

Thankfully, it’s relatively straightforward to calculate the amount you owe once you know your loan amount, repayment term and credit rating. Keep reading to find out more.

What makes up your monthly car payment?

We suggest breaking down your monthly car payments into two sections – finance repayments (which you can figure out via a car finance calculator) and vehicle expenses. The former is the amount you’ll pay back towards the total cost of the car, including interest. The latter covers fuel, insurance, tax, service charges and planned or unplanned maintenance.

It’s important to distinguish between the two. While finance repayments are often fixed (they may fluctuate slightly depending on inflation), vehicle expenses vary considerably. This means it’s wise to set aside a few hundred pounds to buffer against emergencies.

How can I calculate finance repayments?

As finance repayments make up the largest chunk of what you’ll owe, it makes sense to start here. You don’t have to do the maths yourself. Instead, use our hassle-free car finance calculator.

How does it work? Simply input your desired loan amount, preferred repayment term and credit rating. Then, you’ll receive an immediate snapshot of your expected monthly costs, typical interest rate and total amount payable.

We know what you’re thinking – how accurate can this really be? Of course, to provide a thorough assessment, we’d need more information, such as your income and debt. However, calculators offer illustrative examples to help you make an informed decision about what you can afford.

As for the amount, it shouldn’t exceed 10% to 15% of your income. After taxes, the average monthly earnings in the UK are around £2,300. This means you should spend between £230 and £345 on car finance repayments.

How can I calculate other vehicle expenses?

Calculating other vehicle expenses is trickier because they fluctuate. One month, you might only need to budget for fuel. The next, you could have an engine malfunction. You never know what’s around the corner. However, you can mitigate risk by purchasing cars (especially used cars) from reputable sellers.

As a rule, you shouldn’t spend more than 20% of your income on total car costs. Going back to the example earlier – let’s say you take home £2,300 per month and spend £230 on finance repayments. You could effectively spend up to another £230 on vehicle expenses without causing too much financial strain.

If you took out a larger loan for a more expensive car, you’ll probably have less money for additional costs. This is something to consider carefully before entering a finance agreement. There’s no point buying a flashy car if you can’t keep it on the road!

How can I decrease my monthly car payments?

There are a few ways you can decrease your monthly car payments, including:

Purchase what you need, not what you want
Increase your down payment
Improve your credit score

Purchase what you need, not what you want

Quite simply, the more expensive the car, the bigger the loan and monthly repayments. While you might want an exciting four-wheel drive with plenty of leg room and high-tech features, you may not be able to live comfortably and honour your other financial commitments while footing the bill.

Increase your down payment

A down payment is a lump sum paid by the customer towards the value of the car. It’s a bit like a house deposit in the sense that it’s deducted from the total amount owed, meaning you have to pay less overall.

How much should you contribute? It depends. Anywhere between 10% to 20% of the car’s value is ideal – 10% is reasonable for used vehicles.

Improve your credit score

Above all else, improve your credit score. If you have a good or excellent rating, you’ll receive more favourable terms because you’ve proven yourself capable of meeting repayments in the past. On the other hand, people with bad credit scores are considered riskier investments, so lenders tend to bump up the interest rates.

You can improve your credit score by paying direct debits on time, overpaying debt and ensuring you’re on the electoral roll.

Find out how much you could owe today

Want to figure out your monthly car payments? Use our car finance calculator to begin the exciting journey to your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is a Guarantor Loan?

What is CS Car Finance?

What’s the Cheapest Way to Finance a Car?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance car finance options car payments Jan24 used car

Can You Get Cars on HP with No Deposit?

Man with car in front of car bought on HP with no deposit

Purchasing a new car can often feel like a tightrope walk, especially when you’re trying to balance the excitement of choosing your dream make and model with budget constraints. If you’ve been eyeing that perfect set of wheels but the upfront cost seems daunting, no deposit hire purchase could be a clever solution.

Designed to bypass the large initial deposit typically required for hire purchase (HP) agreements, no deposit plans can be a great way to secure the keys to a new car, without parting with a large sum of cash.

Want to know more? Let’s unpack the possibilities and perks of cars on HP no deposit to see if it’s the right move for you.

Understanding hire purchase (HP)

Hire purchase is a bit like the reliable workhorse of car finance options – simple, straightforward and with no unnecessary frills. One of the main features of HP car finance is that agreements end with you owning the car outright. The model splits the cost of your new or used car into manageable monthly payments over a period that you choose, usually one to five years.

The main difference from other plans, like personal contract purchase (PCP), is that you’re working towards ownership right from the start – every payment brings you closer to claiming those keys for good.

Why consider no deposit HP?

Traditionally, HP deals ask for a deposit, often around 10% of the car’s price. This is paid straight out of your pocket. It’s a fast track to car ownership, sure. But it’s also a fast drain on your savings. This is where no deposit HP options come into play, offering a lifeline to motorists who don’t have access to large sums of cash, or want to preserve their capital. Here’s a closer look at who no deposit hire purchase works for:

First-time buyers: Accelerate your journey to car ownership without the time delays associated with saving up a deposit.

Motorists with immediate needs: Get a car quickly, perhaps for a new job or unexpected family growth, without waiting to save enough funds.

Cash flow savers: Keep your savings intact for other life essentials or unexpected expenses.

Top benefits of no deposit hire purchase

Purchasing cars on HP no-deposit plans can be a great option for all kinds of motorists, from first-time buyers to motorway veterans. Here’s a closer look at some of the top benefits of HP with no deposit.

Fast access to a car: Jump straight into the driver’s seat without saving for the initial lump sum. This is car finance, in the fast lane.

Maintain cash flow: Avoid the upfront financial hit and keep your budget breathing easy. No deposit hire purchase gives you more freedom to manage monthly expenses or even splurge on a road trip or two.

Better car options: With no deposit to factor into your budget, you may be able to afford a car with a few extra bells and whistles. For example, a model with the latest infotainment technology, or something with a fuel-efficient hybrid engine.

Predictable budgeting: Fixed monthly payments mean no surprises. You’ll know exactly what you need to pay each month for your car, making it easier to budget for everything from rent and groceries to holidays and entertainment.

Clear path to ownership: Once the final payment is made, the car is all yours. No balloon payments, no residual value calculations and no hidden costs. Just your car, your way.

Things to consider

While no deposit HP sounds like a dream, it’s not without its considerations. Here’s what to keep in mind when shopping around for cars on HP with no deposit.

Higher monthly payments: With no deposit HP agreements, you’re spreading the entire cost of the car across the payment period, with no deposit to reduce the monthly instalments.

Total cost of borrowing: Financing the full purchase price of the car usually means paying more interest over time. It’s worth doing the maths to see how it tallies up against a deposit-based deal.

Credit score impact: Good credit is often crucial for securing a no deposit deal. This is because lenders take on more risk when they don’t collect an upfront payment.

Securing a no deposit hire purchase agreement

Ready to proceed with a no deposit hire purchase agreement? Here’s how to get started in three easy steps:

1. Compare lenders

Not all lenders offer no deposit options, so shop around for those that do. You’ll also see variation between interest rates, terms, conditions and other variables, so it’s worth doing your research to find the right fit.

2. Credit check

Make sure your credit score is in good shape to improve your chances of approval for cars on HP no deposit.

3. Understand the full terms

Before signing on the dotted line make sure you understand all the details, from interest rates to payment schedules. This will help ensure there are no surprises down the road.

Find no deposit hire purchase deals with My Car Credit

With myriad benefits on offer, a no deposit hire purchase agreement could open up new possibilities for managing your finances while securing the car you’ve been dreaming of. No deposit plans are about more than just convenience. They’re about making smarter choices that align with your lifestyle and budget. Whether you’re upgrading from an older model or venturing into car ownership for the first time, HP with no deposit is worth a closer look.

Ready to take the next step? Check out our car finance calculator to get the wheels moving on your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is the Oldest Car a Bank Will Finance?

No Deposit Car Finance – How Does it Work?

What is CS Car Finance?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance car finance options hire purchase hp Jan24 lender no deposit used car

Understanding the three main car finance types

How does PCP work?

How PCP works

Advantages of PCP

Disadvantages of PCP

How does HP work?

How HP works

Advantages of HP

Disadvantages of HP

How does leasing work?

How leasing works

Advantages of leasing

Disadvantages of leasing

PCP vs HP vs leasing: Side-by-side comparison

Quick takeaway:

PCP vs HP vs leasing: Which is best for you?

Best for flexibility: PCP

Best for ownership: HP

Best for low monthly cost & convenience: Leasing

Key things to consider before choosing a finance option

1. How long do you plan to keep the car?

2. How much do you drive?

3. What’s your budget?

4. How important is ownership to you?

5. What’s your credit situation?

Why choose My Car Credit for your car finance?

PCP vs HP vs leasing: FAQs

Is leasing cheaper than PCP or HP?

Can I buy the car after a lease ends?

Which is better for bad credit: PCP or HP?

Do PCP or HP agreements include insurance?

Can I end a PCP, HP or lease early?

Does leasing affect my credit score?

Rates from 9.9% APR. Representative APR 10.9%

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Require more help?

Accidents happen – but if your car on finance is written off, you’ll need to take immediate steps to ensure that all relevant parties are informed. These parties include your insurer, the lender and the DVLA.

What does ‘written off’ mean for a car on finance?

Who owns a car on finance if it’s written off?

What happens if you crash a car on finance with insurance?

What happens if you crash a financed car without insurance?

What if the accident wasn’t my fault?

Do you still have to pay finance after a write-off?

What is GAP insurance and how does it help?

Step-by-step: what to do if your financed car is written off?

Moving forward after a car write-off

FAQs about what happens if you crash a car on finance

What happens if I crash a financed car and it’s my fault?

What if my financed car is written off and I still owe money?

Can I get another car on finance after a write-off?

What if my car on finance with a provisional licence is written off?

Will a write-off affect my credit score?

Can I transfer my finance to another car?

Rates from 9.9% APR. Representative APR 10.9%

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Require more help?

What is a car finance broker?

Brokers vs. lenders: know the difference

Unlock finance options dealers can’t always match

Why Use a Car Finance Broker – Top Benefits

Wider choice of lenders

Soft credit search to start

Less paperwork, faster process

Expert help and ongoing support

Better approval odds for complex applications

When should you consider using a car finance broker?

How the car finance broker process works

Apply for car finance with My Car Credit

Common questions about car finance brokers

Do car finance brokers charge a fee?