Car finance is a great way to spread the cost of a new car. What’s more, it allows you to get a better vehicle and potentially save money on repairs and replacements in the long run. However, the cost of car finance itself can vary quite a bit. This depends on a number of factors, which we’ll discuss in this post.

1.   Cost of the car

The most obvious factor that affects the cost of car finance is the value of the car you’re looking to buy. Car finance is essentially a loan that you take out to pay the dealership or seller. The higher the value of the car, the more money you’ll need to borrow. This will make the monthly repayments higher as well as adding to the interest you’ll need to pay. So, to minimise the cost, more affordable cars are better.

2.   Credit score

Next on the list is your credit score. There are of course plenty of lenders which will provide car loans for poor credit. However, the score itself may affect the rate of interest which lenders will offer you.

Customers with good credit scores are seen as a safe bet, meaning lenders will be able to give them the lower interest rates. On the other hand, those with bad or poor credit scores are a bit more of a risk for lenders. As a result, they may need to pay a higher interest rate to balance out the risk to the lender.

3.   Length of repayment

Much like a standard loan, car finance can be taken out over a variety of repayment terms. Given that cars are quite a large purchase, 24 months is typically the minimum term for car finance. Alternatively, you might want to spread the cost over a longer period such as 36 months (3 years), 48 months (4 years) or even 60 months (5 years).

Paying back your car finance over a shorter term like 24 months will make the monthly cost of car finance higher. This is the result of the cost being spread over fewer instalments. However, it will generally reduce the overall cost of car finance because you will be paying the money back sooner, incurring fewer interest charges.

4.   Car finance provider

This brings us to another consideration – the provider you choose. Interest rates are one of the biggest factors when it comes to the cost of your car finance. Put simply, this is the cost added on to your loan over time as a charge for lending you the money.

Interest rates vary depending on which provider you choose, which is why it’s important to do your research before applying for car finance.

Car finance for poor credit

If you want to find a good deal on poor credit car finance, don’t hesitate to get in touch with My Car Credit. We use a large panel of trusted UK lenders to find a fair deal for all applicants. This allows you to minimise the overall cost for your new car and spread it across a repayment term that suits you.

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating


  • You are a home owner
  • You have been on the electoral role for a long period of time
  • You have current credit arrangements and mortgage with no defaults
  • You have no CCJs, credit arrears or missed payments
  • You rarely apply for credit
  • You are employed or self-employed


  • You are on the electoral role
  • You are a home owner or long standing tenant
  • You have a stable employment history
  • You have current credit arrangements with occasional missed payments
  • You have no CCJs


  • You are or have recently been on the electoral role
  • You may have recently changed address
  • You may have occasional missed payments
  • You may have an old CCJ
  • You may have regularly applied for credit


  • You may have had frequent changes in address
  • You may not be traceable on the voters roll
  • You may have exceeded credit card limits
  • You may have missed payments on current agreements
  • You may have had a CCJ in the past


  • You may not be traceable on the voters roll
  • Your credit cards are over their limits
  • You have recent CCJs
  • You may have been refused credit elsewhere
  • You may be in a debt management plan

X monthly repayments of

Typical rate

Loan amount

Total payable




*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!