Car Finance Options Archives

Do ‘We Buy Any Car’ Buy Finance Cars

When it comes to selling your vehicle, We Buy Any Car makes some big promises. The car buying service operates more than 450 branches across the UK and as the name suggests, pledges to “buy any car”, making the process as quick, easy, and stress-free as possible. But what about cars that have been purchased on finance? Read on as we answer all your questions about whether We Buy Any Car buy finance cars and how to determine if the service is right for you.

Selling a financed car

There are all kinds of reasons why people choose to sell financed cars. Maybe you’ve outgrown your current vehicle and are looking to upgrade to a newer or larger model. Perhaps your financed car doesn’t suit your lifestyle as well as you’d hoped, or your financial situation has changed, and you can no longer commit to monthly repayments.

Whatever the scenario, selling a financed car is possible, if you have a good understanding of the process and your responsibilities as the owner or borrower. Basically, there are two different categories you can fall into:

You own the car outright

This scenario is by far the easiest of the two and means you have repaid your loan in full and own the car outright. A common scenario where this occurs is at the end of a Hire Purchase (HP) agreement, when you’ve finalised all payments towards the final cost of the car, plus settled the ‘option to purchase’ fee. This final payment sees you take full ownership of the vehicle. With it comes the freedom to sell the car however you like, including via the We Buy Any Car service.

There’s also the possibility to own your vehicle outright at the end of a Personal Contract Purchase (PCP) loan. A common form of new car finance, these loans require an initial cash deposit followed by regular monthly payments. At the end of the contract, many people choose to trade in their vehicle for a new car purchased with another PCP contract.

There’s also the option to buy the car outright, which involves paying off the value of the car. This amount is usually determined at the start of the contract, with the value of your initial cash deposit generally subtracted from the total. There can sometimes be additional fees involved when buying a car at the end of a PCP loan, so it’s always worth checking with your lender before deciding.

You’re still repaying the car

If you’re still paying instalments on a car purchased on finance, the process is a little more complicated. First, it’s important to understand that until all scheduled payments have been made and any remaining balances are cleared, the lender remains the legal owner of the car. So, before you can start asking “do We Buy Any Car buy finance cars”, you’ll need to settle all amounts owing and take full ownership of the vehicle.

This could involve ending a PCP loan or HP agreement early, which can incur additional costs. We take a closer look at both options below:

Selling a car on a HP agreement

If you’re still paying off instalments for an HP agreement, the lender legally owns the vehicle. This means you can’t sell it until all outstanding amounts have been settled. You’ll need to terminate the HP agreement early and absorb any additional fees. These can include an early exit fee, which can be as low as 0.5% of the total remaining amount if you have less than 12 months left on your contract. If you have more than 12 months remaining on your HP contract, the early exit fee could be around 1% of the total remaining amount. However, these fees will vary dependent on your individual finance agreement and lender.

Some lenders don’t charge exit fees but instead ask you to cover the total cost of the interest remaining, had you continued with the loan. Writing to the finance company to propose a settlement is another option. If you can agree on an amount, you’re free to sell the car once the balance has been settled.

Selling a car on PCP finance

Like an HP agreement, you can only sell a car purchased on PCP finance after you’ve paid off the entire balance owing. This is generally done by writing to your lender to request a settlement figure. The amount will include all remaining payments scheduled for the vehicle, as well as interest. If you’re unsure how much interest you owe, our guide on how to calculate finance charge on car loan can help crunch the numbers. You’ll also need to settle the final ‘balloon payment’ needed for transfer of ownership to take place.

Returning a financed car

Another alternative is returning your financed car, which can be a good option if you qualify. This is available as part of the Consumer Credit Act 1974 which includes a section on the right to return the car to the provider.

Generally, this option is only available if you’ve paid off at least 50% of the total cost of the contract. This amount includes all interest and fees owing, not simply the original amount borrowed. If you’ve paid off less than 50% of the total cost of the contract, you may need to top up your instalments to meet this minimum requirement.

Don’t forget, there may be additional fees involved and you may still have to cover the cost of interest, so be sure to read the fine print in your contract before making a decision.

Understanding ‘voluntary termination’

There’s a good chance your contract may include a clause known as ‘voluntary termination’. If you see this, it means you’re free to return the car to the lender without making any extra payments. As mentioned earlier, you’ll need to have paid off at least 50% of the total value of the loan to qualify for this option.

Voluntary termination doesn’t usually affect your credit score, making it a good option if you’re researching whether We Buy Any Car buy finance cars.

Upgrading your car on finance

If you’re looking to sell your existing car and upgrade to a newer model using finance, My Car Credit is on hand to help. We compare deals across our broad panel of lenders to find car finance that fits your requirements. If you’d like to find out more, simply email us on enquiries@mycarcredit.co.uk or simply apply online, with no obligation and no impact on your credit score.

Rates from 9.9% APR. Representative APR 12.4%

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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

we buy any car

Is It Illegal to Sell a Car with Outstanding Finance?

Using car finance is a popular way of managing the purchase of a new vehicle, and you can usually secure a car loan quote within minutes from different providers. If you find yourself wanting to change vehicles before the end of your car finance term, you can sell your financed car – but only if you settle any outstanding finances, and only with the approval of your finance provider.

Do you own a car at the end of a car finance term?

There are three types of car finance where you may end the finance term as the legal owner of the vehicle – a personal loan, personal contract purchase (PCP) and hire purchase (HP).

At the end of HP car finance, you will be the legal owner of the vehicle. Once that finance term has ended and you have made all of your repayments, you can then choose to resell the vehicle, as you are its owner.

At the end of PCP finance, you don’t own the car unless you choose to do so, in which case you’ll pay a balloon payment or lump sum. Once you’ve made this repayment, you’re the vehicle’s legal owner, and can therefore choose to resell it.

If you buy the car with a personal loan, then you are its legal owner, and can resell it whenever you choose – just remember to keep making your repayments on this loan.

Is it illegal to sell a car that has finance outstanding?

As described above, there are three types of car finance that enable you to legally own the car at the close of the car finance term. Provided that there is no finance outstanding on this vehicle, then you are free to do with it what you will – including selling it on.

However, if you have a car that still has finance outstanding on it, then you must contact your finance provider before selling it. If you have outstanding finance, that means there are still repayments that you need to make on the car. As such, you are not its legal owner.

If the car has outstanding finance on it, then it is illegal to knowingly sell it on without informing either your provider or the buyer. Failing to disclose that the car still has debts and fees to be settled is fraud, and you may end up prosecuted as a result.

Both the finance provider and the buyer will be impacted should you illegally choose to sell on a car with outstanding finance. The provider may take you to court over unsettled fees and/or breaking your contract terms. Meanwhile, the buyer could see the vehicle repossessed.

Find out more about car finance

If you have any questions about your rights when it comes to selling a financed car that you secured through My Car Credit, our team are on hand to help. Call us on 01246 458 810 or email enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

What is Hire Purchase? – Simple HP Explanation

5 Different Ways to Pay for a Car

How Much Does Car Finance Cost? Check Now!

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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

How to Reduce APR on a Car Loan

Brits are no strangers to car loans, with the latest statistics revealing around two million cars are purchased on finance every year. With so many benefits on offer, it’s no surprise so many British motorists embrace car loans.

As the APR has to be disclosed prior to the signing of any paperwork, you can look around and get a car finance quote that outlines the APR you’ll likely be paying. By implementing the seven steps below, you may be able to either reduce APR on a car loan, or find a deal that feels more manageable for your circumstances.

7 steps to reduce APR on a car loan

1. Improve your credit score

Your credit score is one of the most significant determiners of your APR. If you’ve missed previous payments, your score will be lower, and your APR is consequently going to be higher.

Essentially, the higher your credit score, the more likely you are to qualify for a low APR. If you don’t immediately need to purchase a new vehicle, it might be worth waiting whilst you build your credit score up over time.

2. Apply with a co-signer

If you do have a poor credit score but need a vehicle immediately, you’re more likely to secure a low APR if you apply with a guarantor with strong credit. This essentially spreads the risk of the loan out, which makes you more attractive to a lender.

A guarantor is responsible for repaying any missed payments – or even to pay the loan back in full should the circumstances require it. Bear in mind also that any missed payments by you will show up on their credit score.

Being a guarantor is a huge responsibility and so it is important that both you and your guarantor understand what is involved before going ahead.

3. Go for a shorter repayment term and don’t borrow too little

Shorter repayment terms will typically have lower interest rates. You’ll end up paying more with your monthly repayments, but the APR overall will be lower. Similarly, don’t go for a loan of only a few thousand pounds. Because these smaller loans are paid off far quicker, they’ll tend to have higher interest rates. It’s a far better idea to wait and save up the amount that you need than taking a low loan with a high APR on it.

4. Choose a cheaper car

It’s pretty simple – if you borrow less money, your APR will be lower. You may feel that you want the expensive car with all the add-ons, but this might mean that you’re having to borrow serious amounts of money. Your monthly repayments will consequently be higher, and so will your APR.

Look for a cheaper vehicle and take out a smaller car finance loan. Consider, too, whether you might get a better finance deal on a new car than on a used car. This might seem contrary but used cars will have higher mileage and more wear and tear, which makes them more vulnerable to breakdown. These are all factored in by lenders when they propose an APR.

5. Pay out for a larger down payment

If you’re willing to put down cash for a larger down payment, you pose less risk to a lender. As a result, you’re likely to have a lower APR. You’ll also pay less overall because you won’t be borrowing so much.

6. Refinance your car

Depending on the terms of your car finance, you may be able to refinance your vehicle partway through the agreement. If you refinance your car, you’ll typically apply to a new lender, who will pay off your existing loan and replace it with a new one. This new one may have a lower APR, and might also have lower monthly repayments, depending on what you’re able to negotiate.

7. Prepare to negotiate and shop around

Depending on the lender you’re looking at, you may be able to negotiate to lower the APR. Many will show you pre-approved rates, meaning there might be the potential to reach an alternative agreement.

Alternatively, it’s in your best interest to shop around. Take the time to investigate different deals offered from different lenders and find one that works for you.

Get a quote today

If you’re shopping around for car finance, don’t forget to use My Car Credit’s car finance calculator. Since we look for the best deal from our large panel of lenders, we may be able to reduce APR on a car loan compared to other car finance companies. What’s more, we’ll only ever do a soft credit check when calculating a quote for your car finance needs. As such, you can get a better idea of how much it will cost without increasing your APR in the long run!

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

Car Finance: A Complete Guide

Advantages and Disadvantages of PCP Car Finance

Car Finance or Personal Loan – Which is Best 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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

apr apr calculator

How Do Car Loans Work? A Complete Guide

Brits are no strangers to car loans, with the latest statistics revealing around two million cars are purchased on finance every year. With so many benefits on offer, it’s no surprise so many British motorists embrace car loans.

Of course, like many financial topics, car loans can be a little confusing. Especially if you’re buying your first car or have never taken out a loan before. The good news is, we’re here to help with a complete ‘how do car loans work’ guide.

Read on for everything you need to know about car loans in the UK, including the main benefits of car loans, an intro to industry lingo, some interesting statistics and more.

Car loans: 101

When you look past all the paperwork, car loans are pretty straightforward. Here’s a simple step-by-step how do car loans work guide:

First, you choose the amount you would like to borrow. This number can be calculated by subtracting your cash deposit from the value of the car you would like to purchase. Your car loan will make up the difference and allow you to purchase your chosen vehicle.
Next, you’ll choose the length of your loan term. This determines how long you’ll have to repay the loan. Payments are usually made monthly. A car loan quote calculator can give you a better idea of costs without harming your credit score.
When your loan is approved, the lender will transfer money directly to the approved car dealer you are buying your car from.
After the purchase has been made, you’ll start to pay back loan instalments to your lender, usually on a monthly basis.

The key benefits of car loans

Why do so many Brits choose to take advantage of car loans? Here’s a brief look at the key benefits of auto finance:

Increase your buying power

How do car loans work? Car loans give you the freedom to increase your budget and purchase your preferred vehicle, without having to pay outright.

Get behind the wheel sooner

Car loans boost your budget in a matter of days, allowing you to get behind the wheel sooner instead of spending months or years saving.

Car loan lingo explained

Wrap your head around auto finance with this quick guide to car loan lingo:

Agreement term – the total length of your loan.

APR – short for annual percentage rate. This is the additional amount you’ll pay back, on top of the loan. A good car loan lender should offer APR rates from 6.9%.

PCP – short for personal contract purchase. These types of loans include monthly payments, as well as a balloon payment at the end of the loan if you’d like to own the car outright.

Total repayable – the final balance owning, including the loan itself as well as interest, fees, and other payments.

Average car loan repayments

We know that around two million cars are purchased on finance every year but what about repayment figures? Studies suggest the average British motorist puts £194.80 per month towards car finance payments. After rent and mortgage payments, 65% of motorists say their car is the biggest outgoing expense in their life. Interestingly, men spend a little more with payments averaging £215.70. Women are a little thriftier and spend £173.30.

What about insurance?

You’ll still need to purchase insurance when you take out a car loan, so don’t forget to factor this into your budget. Expect to pay around £53.40 a month for car insurance. Again, men tend to have higher premiums and pay around £64 per month while women average just under £42.

Tips for choosing the right car loan

All car loans are designed to increase your buying power but not all contracts are created equal. When choosing a car loan, it’s important to do your research and learn as much as possible before making a commitment. Here’s some tips to help you understand how do car loans work.

Sign on with a trusted provider

Your car loan experience can vary enormously depending on the provider you sign on with. When shopping around for car loans, trust and transparency should be front of mind. Reading reviews is a great way to get a genuine idea of what your preferred lender is like. You can also look for car finance platforms backed by trusted names. For example, Evolution Funding.

Read the small print

No matter how confident you are in your lender, it’s always advisable to read the small print before signing on the dotted line. You never know what could be hidden in the terms and conditions.

Ask questions

A good lender should be happy to answer all your questions without hesitation, no matter how big or small. Ultimately, asking questions about how car loans work will help give you total peace of mind.

Set up a direct debit for repayments

We get it, life can get busy and sometimes loan repayments can slip your mind. That’s why it’s best to set up direct debits for your loan repayments. This way, you’ll never have to worry about remembering to transfer instalments to your lender. Instead, the money will simply come out of your account each month.

As well as making your car loan experience as streamlined and stress-free as possible, setting up a direct debit will ensure you don’t miss any repayments. This is the last thing you want as missed instalments can have a negative impact on your credit history. This leads on to our next tip – never bite off more than you can chew when it comes to car loans.

Borrow a sensible amount

Before committing to a car loan, it’s important to crunch the numbers and make sure your loan is realistic and manageable. It can be tempting to borrow more to increase your budget but at the end of the day, you need to be able to manage your repayments with minimal stress.

Speak to our car loan experts

Want to know more about how car loans work in the UK? Whether you’re purchasing your first car or looking to upgrade your vehicle, we’re here to help. Get in touch with the My Car Credit team today to find out more about competitive car loans backed by an extensive and varied network of car finance lenders.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

How Do Balloon Payments Work?

No Deposit Car Finance – How Does it Work?

How Long Does It Take to Buy 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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

application process Jan24 paperwork

Can I Part Exchange a Car on Finance?

Getting a new car is exciting, but if you’ve already got a vehicle that you purchased via car finance, it might seem complicated. In theory, part exchanging your financed car is a way of trading in your current car for a new one. Moreover, you can use the value of the old one to support the new purchase. In this post, we’ll explore whether it’s possible.

What is a part exchange?

A part exchange is a common practice when buying new cars. Drivers give their existing vehicle to a car dealership to cover some of the purchase price for their next car. In most cases, the existing car counts as a car deposit, meaning you don’t need to save up more money and part with a lump sum to get a different car.

Let’s say your car has a current value of £4,000. You can use that as a deposit on a car worth a lot more, then pay the rest yourself or arrange a finance deal for the remaining amount. The latter is advantageous as it spreads the cost to give you more flexibility with what you can afford.

Part exchanging a car is beneficial because it allows you move to your next vehicle sooner, giving your budget a boost by leveraging the value of your car. It also takes away the hassle of selling your existing vehicle privately. Selling a car privately to fund your next car has the added complication of timing everything right and potentially being without a vehicle for a short period. This is all eliminated by part exchanging.

Is it possible for a financed car?

Things are a little more complicated with part exchanging a car on finance, as you may not own the car outright. Until you pay off car finance agreements, the car is usually still owned by your finance provider. That said, you will have paid some of the cost of your current finance agreement via the deposit and monthly instalments, which gives you some value in your current car.

If you part exchange your financed car, you’re trading it in for a new one, and putting any proceeds from the exchange towards the new purchase. Part exchange will typically be more convenient than a private sale, as the dealer will manage all the paperwork. It’s also a way of changing car without having to either pay off your car finance early or cancel it outright.

Where you’re eligible for part exchange, it can be a great way of finding a new set of wheels. However, not everyone is eligible for a part exchange – it’s contingent on what kind of car finance you have, how much you have paid off on your financed car and some other factors.

Who is eligible for part exchange?

You should be able to part exchange your car if you purchased a car on finance via either a Hire Purchase (HP) agreement, Personal Contract Purchase (PCP) agreement, or a personal loan. However, if you have financed your car via a PCH agreement, you won’t be eligible, as you are not the car’s legal owner at any point. Also known as leasing, personal contract hire (PCH) essentially means you are paying to use the car but not working towards owning it.

If you financed your car via a hire purchase or PCP deal, you can part exchange your car at the end of the finance agreement and put any value toward the new vehicle (or a deposit for the same).

You can also part exchange your car during your agreement – but whether or not this is a good idea depends on how much your car is worth, and how much you still owe. You’ll have to settle any outstanding balance before the part exchange can take place. This is done with a settlement figure or a negative equity finance agreement, which we discuss below.

How to part exchange a car on finance

There are a few considerations if you want to part exchange a car with a PCP agreement or HP finance agreement. Firstly, be aware that you’ll need the car’s logbook – known as its V5C – as well as any relevant paperwork, the vehicle manual, MOT and service documents.

Here are some additional things to factor into your part exchange deal…

Value vs outstanding finance

Before you part exchange a car, you need to know its value, as well as anything you still owe to your finance plan. The value of your car will be affected by how much you’ve cared for it, but it’s also dependent on the car’s mileage, service history, and specification.

This will then be weighed up against your outstanding finance – how much you have left to pay on your finance contract, including monthly payments and a balloon payment if you have PCP finance. The result of this calculation can give you either positive equity or negative equity, as described below.

Positive equity for a financed car

You may find you have a PCP deal that leaves you with a vehicle that’s worth more than your outstanding final payment. This is because you’re borrowing against the depreciation value of the car – not the purchase price. This puts you in a good position for a part exchange, as you’ll be in positive equity.

It’s best to go into a part exchange with positive equity – a car that’s of greater value than any outstanding finance. You can then put the positive equity toward the cost of a new vehicle. Remember that if you’re looking to purchase your next car by finance, the higher your deposit payment, the lower your monthly repayments will be.

So, positive equity essentially makes your new car finance agreement a little bit cheaper.

What about negative equity?

If the remaining balance on your finance is more than the car’s value, then you’re in negative equity. You may still be able to part exchange the car. This would require either you or the company you’re part exchanging the car with to pay a lump sum, rolling any debt into a negative equity finance agreement or paying a settlement figure.

Be aware that with a negative equity finance agreement, you will be paying off both your old car and new car, so you will likely notice a serious increase to your monthly repayments. Interest rates will also be higher, and you’re at higher risk of going into further negative equity.

Getting a settlement figure

To part exchange a car on finance with negative equity, you may need to get a settlement figure from your lender. This is where they’ll confirm any outstanding finance and positive or negative equity, which is used to calculate a settlement figure (or settlement amount) before you can part exchange your current car.

The settlement figure can sometimes include a final balloon payment and there may also be an early termination fee for your car finance agreement.

Talk to My Car Credit

If you’ve got questions about whether a part exchange is for you, contact My Car Credit today. We can address any concerns you may have and help you establish your car finance eligibility to part exchange a car. If you have an existing agreement, we can advise on the next steps to take with your finance company, before comparing deals from multiple lenders to part exhange a car and move to a new car finance deal.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

How Much Does Car Finance Cost? Check Now!

How Long Does It Take to Buy a Car?

What is a Balloon Payment on a Car 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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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 early settlement Jan24 part exchange settlement figure

Why Does Car Financing Take So Long?

Buying a car is a big investment and according to the latest data, more than 90% of Brits take advantage of finance and leasing options when purchasing a new vehicle. They can be a great way to maximise your budget and unlock access to newer and more desirable models without stretching yourself too thin.

While car financing is a popular alternative to purchasing a car outright, it’s doesn’t have the same ‘quicky and easy’ reputation as applying for a new credit card or taking advantage of ‘buy now, pay later’ services like Klarna, Laybuy and Clearpay.

So why does car financing take so long? Securing car financing can take time as there are some important steps that need to be completed before your application is approved. Below, we take a closer look at the car financing process and why it can sometimes take so long.

Why are applicants carefully vetted?

The average motorist spends around £226 per month on car finance payments, allowing them to get behind the wheel of their dream car without laying down an unrealistically high lump sum. However like any lender, car financing companies want to make sure the benefits outweigh the risks when approving applicants.

To do this they carry out credit checks designed to give them an idea of your borrowing habits. While multinational consumer credit reporting company Experian says there’s no ‘magic number’ that will secure you a loan, a ‘good’ score falls between 881 and 960 while an average score sits somewhere between 721 and 880.

Finance & Leasing Association (FLA)

The car financing industry is strictly regulated to protect both borrowers and lenders. The Finance & Leasing Association is the industry’s leading trade body and is made up of hundreds of members, including banks, independent financial firms and building societies.

Lenders approved by the FLA are subject to stringent protocols, which can slow down the loan application process but ultimately helps to improve the car loan experience for everyone involved.

Despite the challenges presented by issues such as COVID-19 travel restrictions and supply chain disruptions, FLA Director of Research and Chief Economist Geraldine Kilkelly predicts further industry growth over the next year.

“Despite the risks to the economic and market recovery from supply chain disruption, higher inflation and further waves of Covid-19, our latest research suggests that the industry has maintained its optimism about the opportunities for growth,” says Kilkelly. “FLA’s Q4 2021 industry outlook survey shows that 88% of motor finance providers expected new business growth over the next twelve months.”

Compiling your documents

From renewing your driver’s licence to applying for a new passport, most serious applications call for documents and paperwork. Car finance is no exception, with multiple forms, documents and contracts to sign before you get the green light. This includes things like proof of income, proof of address, copies of your driving license and personal bank details. All need to be passed on to your finance lender before you’re approved, which can stretch out the process.

If you’re wondering why does car financing take so long and want to speed up the process, it’s a good idea to prepare in advance and keep all your key documents in an easy to access folder.

Soft vs hard credit checks

One of the best ways to fast-track your car finance application is to kick off the process with a soft credit check. These are quick and easy to run, combing through your financial history without leaving a permanent mark by your name. A soft credit check will give you a good idea of what types of loans and amounts you’re eligible for. Knowing this will help your decision-making process when applying for car loans and boost your chances of approval.

Stay away from hard credit checks, if possible, as these leave a signature on your record. They’re carried out by dedicated credit agencies like Experian and Equifax and dive deep into your financial history. While you’ll probably need to undergo a hard credit check before you’re approved for a loan, this should be the last step and ideally shouldn’t occur more than once. Basically, you only want to go ahead with a hard credit check if you’re certain you’ll be approved.

Speed up the process with My Car Credit

Why does car financing take so long? The truth is it doesn’t have to. With the right people on your team, car financing doesn’t have to be a headache. As part of the largest motor finance broker in the UK, My Car Credit makes finance simple and accessible.

We regularly receive great feedback from our customers about the speed of our service, for example:

“The whole process was very simple. I was assisted by the friendly staff every step of the way. I got a reasonable rate, and it was all terrifically efficient.” Ben B

“Absolutely brilliant, made it very easy and clear and had it sorted and cleared with the car company in no time.” Steven Canning

“Very helpful and extremely quick. Perfect customer service.” Jack Murray

“This was the most efficient and quick process I have experienced. Very helpful, no need to chase, they are always updating you daily – would definitely use again and recommend!” Mrs H

Powered by Evolution Funding, we combine our award-winning technology with access to a broad panel of lenders. This allows us to match you with the best products and lenders for your unique circumstances, improving your chances of acceptance and securing the best possible rates.

It all starts with a car loan quote using our quick and easy finance calculator. When you’ve crunched the numbers and determined your budget, you can get the ball rolling and secure your car financing as fast as possible.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

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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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

application process car finance process Jan24 paperwork

How to Sell a Financed Car

Woman researching how to sell a car on finance

Car finance is an ever-popular scheme that allows drivers to get behind the wheel without forking out a significant sum of cash. With car finance, you’ll typically be paying out a series of pre-agreed monthly repayments to a lender. Therefore, until you have made all of these repayments, the lender is the vehicle’s legal owner.

There are, however, ways to sell a financed car – but it’s contingent on what type of car finance you have.

Different types of car finance

There are four main types of car finance:

Personal contract purchase (PCP)

PCP car finance is like a long-term rental. You’ll usually pay an initial deposit and then a series of monthly repayments for a period between two to four years. As a result, at the termination of the agreement, you won’t own the car unless you pay a lump sum to do so. It is also possible to finance this lump sum, or balloon payment. Alternatively, you can either return the car to the dealer or trade it in for another car on PCP.

Hire Purchase (HP)

You do own the car at the end of a HP finance deal, and, unlike PCP, this means there’s no balloon payment at the agreement’s end. As such, you’ll initially pay a deposit and a series of monthly repayments that are usually higher than PCP finance.

Personal Contract Hire (PCH)

You won’t own the car at the end of PCH finance and are never its legal owner. PCH is a long-term rental – you’ll pay an initial deposit and fixed monthly payments.

Personal Loans

As with a personal loan for any purchase, these come from financial institutions and are usually repaid over a longer period than any of the other finance options. In addition, as you are technically a ‘cash buyer’, there’s no balloon payment or deposit.

Can I sell a financed car?

You may be able to sell a financed car that has been purchased via three of the above methods of car finance.

If you have financed your car via a PCH agreement, you will not be able to sell your car. The lender remains the legal owner of the vehicle, and, as such, you are not entitled to sell the car.

How to sell a car financed by PCP

You are not the legal owner of the vehicle until you’ve paid off the pre-agreed monthly instalments. That said, you can sell a car that’s been financed by PCP. Be aware that there will likely be early exit fees or what’s known as voluntary termination clauses in your contract.

You may be eligible for voluntary termination once you’ve paid off 50% of the total finance – and remember that this includes fees and interests. If you haven’t repaid 50%, you can end the agreement early by repaying the difference. Moreover, you can then return the car, which is essentially selling it. From there, you can purchase a new vehicle via alternative car finance.

Alternatively, you can pay off your PCP agreement early. You’ll need to contact your car finance provider to ask for a settlement figure. Once this is paid off in full, you can then resell the car. If the settlement fee is less than the cost of paying your monthly instalments, this may be the more financially savvy option.

How to sell a car financed by HP

As with PCP, you are not the legal owner of the vehicle until all of the monthly repayments are made. Consequently, you’ll need to pay these off before being able to sell the car.

The voluntary termination clause in your contract will allow you to return the car to the lender once you have repaid 50% of the total car finance. If you’ve paid less than 50%, you can usually still return the car. However, this is as long as you make up any remaining instalments that will take you up to half the vehicle’s value.

Alternatively, you can pay the agreement off early and then sell the car, as with PCP above. Remember to request a settlement fee from your car finance provider, which you’ll need to pay in full.

How to sell a car financed by a personal loan

With a personal loan, you’re the legal owner of the car. Therefore you can sell it whenever you’d like – but remember, you’ll likely owe repayments on the loan that you need to upkeep.

My Car Credit can help

If you have questions about how to sell a financed car, the team at My Car Credit can help. We’ll provide guidance on your options depending on your car finance agreement and assist with your car finance eligibility moving forward.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

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What is Hire Purchase? – Simple HP Explanation

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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

early settlement selling a car

Can I Buy a Car Through My UK Limited Company?

Man discussing whether he can buy a car through limited company uk

Owning a car that’s been purchased through a UK-based limited company is a viable option for a business. However, it’s worth evaluating whether this is really your best option, or whether there are more suitable alternatives.

Can you buy a car through a UK limited company?

The short answer is yes. However, there are a number of variables that you need to consider, which include the vehicle type, usage, and its CO2 emissions.

Benefits in kind

One of the first things to ask yourself before deciding whether or not to buy a car through your limited company is what that car will be used for. If you are using it for any private use – including the commute to and from work – your company will need to pay a tax called ‘benefit in kind’ (BIK). This is based on the value of the vehicle when it was new. The company will also need to pay Class 1A National Insurance.

You can only claim back VAT on a car that’s used exclusively for work purposes. Similarly, you may end up being taxed on fuel in addition to the BIK tax.

It’s also worth noting that having a car through a limited company means putting its day-to-day running costs through company accounts, which may impact profit margins.

Capital allowances

If you choose to buy a car through your UK limited company, you’ll be able to claim tax relief through capital allowances. The amount you can claim, however, is dependent on the car’s CO2 emissions. The more CO2 released, the higher the tax you’ll need to pay.

Financing a car through your limited company

Car finance is a sensible option if you’re looking to spread the cost of a car when buying through your limited company. Calculate your car loan online or contact our team to talk more about buying a car through your limited company.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

How Much Does Car Finance Cost? Check Now!

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What is a Balloon Payment on a Car 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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

company car limited company

Should I Get My First Car on Finance?

Woman thinking about getting her first car on finance

“Should I get my first car on finance” is a question many new motorists find themselves asking. If you’re tossing up between whether to purchase your first car outright or take advantage of finance options, this article is for you.

Read on for five reasons why you should finance your first car, as well as some cons to consider.

1. Unlock access to more desirable models

If you’re wondering if you should get your first car on finance, you probably don’t have the cash to pay for a vehicle outright. Buying a car is a big financial commitment. Furthermore, most people can’t afford to lay down thousands of pounds at once. This is where car finance comes in.

Financing your car is a desirable option for new drivers as it allows you to get behind the wheel of a vehicle that would otherwise exceed your budget. Instead of a lump payment, the cost of ownership is spread over a pre-determined timeframe. As a result, you pay small monthly repayments. Bear in mind that car finance isn’t a greenlight to purchase a luxury SUV on a graduate salary. However, it does allow you to expand your horizons and buy a better car without the need for a huge deposit.

2. Enjoy more reliability

As discussed above, car finance allows you to purchase a car that would otherwise be out of your price range. With this comes the luxury of more reliability on the road. If all you can afford outright is a battered Volkswagen Golf with 200,000+ miles on the odometer, chances are you’re going to run into some problems on the road. With the same budget, car finance allows you to upgrade to a newer and more reliable model.

3. Build a good credit score

If you’re just starting to flex your financial muscles, car finance can be a great way to build up your credit score. Bear in mind that you’ll need to be responsible about your monthly payments and commit to a payment plan you can afford. Consequently, signing a car finance contract (and paying it off) is a gold star on your credit score. In the future, this will help you when applying for credit cards, mortgages and other financial commitments.

4. Stretch your insurance budget

New drivers pay some of the highest insurance rates in the UK. As a result, the average motorist aged 17-24 forks out more than £1,200 a year. As such, new motorists wondering where they’re going to find that extra £100 a month to cover the cost of insurance may well opt for finance on their first car. With car finance, you can spread out the cost of car ownership and avoid draining your bank account to purchase a car outright. This means you’ll still have plenty of cash to cover essentials like car insurance, road tax, fuel, and general maintenance.

5. Hold onto your savings

Should I get my first car on finance? If you want to hold onto your savings and ensure you have funds for a rainy day, the answer is yes. While you may still need to make an initial down payment (but not always), car finance spreads out the total cost of ownership. As a result, you don’t need to spend all your cash, all at once. This leaves you free to pay off your credit card or simply stash your savings in a high-interest account and watch them grow.

The cons to car finance

While car finance is a wonderful thing and comes with a laundry list of benefits, it’s not always for everyone. To balance out the scales, here’s a few reasons why you may not want to purchase your first car on finance.

• Interest payments can add up

Car finance stretches your budget further, but it does mean you’ll pay more for the vehicle due to interest costs. The good news is, with a good car finance team on your side you can keep these costs as low as possible. In many cases, using car finance to purchase a newer vehicle translates to better fuel economy and less trips to the garage. The money you save can be used to cover interest payments, making car finance a great solution for your first set of wheels.

• Risk of repossession

Your car is secured by your finance loan which means if you default on payments, it could be repossessed. While this is an issue for some, most car finance applicants are responsible and have no trouble making payments on time. The key is to pick a car that falls within your long-term budget and only commit to monthly payments you can afford.

Get behind the wheel with car finance today

Ready to get behind the wheel of your first car? Whether you’re a teenager who’s just passed their driving test or an adult in the market for their first vehicle, we’re here to help. With rates starting from just 6.9% APR, we offer some of the most competitive car finance deals in the UK.

Car finance options

Worried about your credit rating? Don’t be. We have access to one of the largest lending panels in the UK. This means we can create tailored finance solutions for motorists with gold-standard credit ratings, as well as those with not-so-perfect scores. If you’re a young driver and your credit rating is still in the works, guarantor finance can be a savvy solution for the responsible borrower. Backed by a family member, this payment plan reduces the risk for the lender and increases the likelihood of an acceptance. It’s just one of many ways we can help you enjoy all the benefits of purchasing your first car on finance.

Give us a call today to find out more about our competitive car finance rates and chat to an advisor about how to get started.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

What is a Guarantor Loan?

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Leasing vs Finance: What’s the Difference and Which is Better?

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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

buying first car first car Jan24

Who is the Legal Owner of a Car on Finance?

happy man who has become legal owner of car

If you’re thinking about purchasing a car through a finance option, you’re not alone. Around nine out of 10 of the new cars sold in the UK are bought by people who use a finance option. However, there are still some grey areas when it comes to ownership.

More specifically, who is the legal owner of a car on finance? Is it the driver or the dealership? Read on as we provide the answers.

Who is the legal owner of a car on finance?

In truth, the answer is neither you nor the dealership. It’s the lender that provides the money. The person who drives the vehicle and maintains it – AKA you – is known as the Registered Keeper in legal parlance. In other words, you will make the repayments and deal with the day-to-day running of the car, but your name won’t be on the V5.

Is there any difference between the finance options?

Yes, there are, but only when the loan finishes. Both PCP and HP are agreements that require repaying before the V5 is transferred to you. However, something to keep in mind is the final payment regarding PCP. Unless you pay off the balloon repayment, you will not own the vehicle. Where you don’t have the cash or savings, you may have the option of taking out balloon payment finance instead. With Hire Purchase, the last instalment of your loan will clear the balance and make you the legal owner.

Do I have other options?

One thing you can do if you want to be declared the legal owner is to use a bank loan. That way, you pay back the money to the bank, and the vehicle is all yours from the outset. Of course, taking out an unsecured bank loan may not be an option for your circumstances. In addition, you may not find the terms competitive.

Find the right finance deal

At My Car Credit, we help drivers up and down the UK find the finance they need to upgrade their car – and eventually own it outright if preferred. It doesn’t matter whether your budget is small or if you don’t think you qualify, we try to accommodate everyone, including those looking for car finance with poor credit.

To find out more, please contact us on 01246 458 810 to speak to an advisor.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

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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 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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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