car finance options Archives - Page 6 of 7

Can You Pay Monthly for a Used Car?

Opting for monthly payments is one of the smartest decisions you can make when purchasing a used car. Many Brits think payment plans are just for new vehicles and as a result, don’t ask “can you pay monthly for a used car?” when shopping for a second-hand ride. This is a big faux pas as car finance offers some fantastic benefits; when done right.

Want to know more? Read on as we answer all your questions about can you pay monthly for a used car.

Scenarios where used car finance steps up

Below, we explore some scenarios where used car finance can step up as a great purchasing option:

You want to stretch your budget

With the latest research from Auto Trader revealing the average cost of purchasing a used car in the UK is whopping £18,000, even second-hand vehicles are out of reach for many Brits. If you think this sounds high, you’re probably not alone. Over the past year, the typical cost of a pre-owned vehicle has increased by around £4,000. Large, family-friendly models are the most coveted, though the drastic price increase of almost 32% has hit all vehicle types.

If you’ve got a healthy deposit but can’t afford to pay the full amount in cash, car finance can help stretch your budget. It’s not about biting off more than you can chew and splurging on a vehicle you can’t afford. Instead, car finance can be a clever alternative to get behind the wheel of a used car within your budget, only faster.

Crunching the numbers is important, so take the time to factor in variables such as your budget, cash deposit, preferred loan term and your credit score, which can affect the interest rates you’re eligible for. Our cost of car finance calculator is a great place to start.

You want to boost your credit score

Committing to monthly payment plans, such as a car finance loan, can be a great way to boost your credit score. If a big financial move like applying for a mortgage or increasing your credit card limit is on the horizon, car finance can be a great way to improve your reputation as a borrower and prove to lenders that you’re a responsible applicant.

You want to be a competitive buyer

Factors like the global semiconductor chip storage, supply chain issues caused by the pandemic and conflict between Russia and Ukraine have hit the used car market hard. According to Richard Walker from Auto Trader, “the speed in which used cars are selling has also accelerated significantly, with the average car taking 11 days fewer to leave forecourts in February 2022 when compared to the same period last year.”

Demand for used cars is high which means you’ll likely face competition from other buyers. Car finance can help you make a realistic offer on a used car and give dealers the peace of mind that payment is guaranteed.

Understanding loan types for used cars

As a used car buyer, you enjoy the same auto loan options available with new models. These include:

Personal contract purchase (PCP)

PCP loans are one of the most popular ways to pay for used cars. Offered by car dealerships and independent lenders, they allow you to spread out payments for your vehicle over three to five years. You may need to make a cash deposit but options are available without.

Payments are calculated using the price of the car, the interest rate (APR) of your loan and most importantly, the expected depreciation rate of the vehicle. Your lender will calculate a guaranteed minimum future value (GMFV) and at the end of the loan, you’ll have the option to make a ‘balloon payment’ equal to the GMFV to keep the car. Alternatively, you can use the GMFV to fund a new PCP agreement.

Personal contract hire (PCH)

PCH loans are another great way to get into the driver’s seat of a used car faster. Also known as car leasing, you pay a cash deposit, then continue to make monthly payments for the duration of the lease term. Most agreements span for between two and five years, with longer terms translating to lower monthly instalments. At the end of the contract, you’ll give the car back to the dealer.

Hire purchase (HP)

As the name suggests, HP loans see you ‘hire’ a vehicle for a fixed period, usually between one to five years. You may need to make a cash deposit, but no-deposit options are available, then continue to make monthly instalments over the course of the loan. At the end of a HP plan you’ll have the option to take ownership of the car by paying a transfer fee.

Personal loan

If you want to own your car outright, a personal loan can be a good way to boost your budget. A lender will agree to a fixed sum, which you’ll use to purchase a used car. You’ll then repay the loan in monthly instalments, usually spread out over a year or more. Generally, the higher your personal loan, the lower your APR will be.

Can you pay monthly for a used car?

The final verdict on whether you can pay monthly for a used car? Absolutely. Auto finance can be a terrific way to pay for a used car, with different benefits appealing to different buyers.

Ready to get behind the wheel of your dream used car? Whatever your budget or credit rating, we’re here to help. With access to one of the biggest panels of lenders in the UK, we have the connections to secure you the best possible deals on finance for used vehicles.

You can calculate car finance and apply without impacting your credit score. Alternatively, get in touch by email or give us a call on 01246 458 810 to find out more about how can you pay monthly for a used car.

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

Is Car Finance a Personal Loan?

When you secure a car on finance, you’re borrowing money in order to pay for your new vehicle. You’ll then repay this loan via a series of pre-agreed monthly instalments.

There are different kinds of car finance that you can secure, and which one is right for you will depend entirely on your circumstances.

The language around loans and finance agreements can be confusing. This article is here to help you differentiate between them and decide what option is best for you.

What are the different types of car finance available?

If you are not a cash buyer, you’ll likely need to get a car finance quote and establish which finance option is best for you.

There are three main types of car finance:

Hire Purchase (HP)

With HP car finance, you’ll have the option of paying an initial deposit followed by a series of pre-determined monthly repayments. Because you will own the car at the end of an HP finance deal, your repayments are likely to be slightly higher than with PCP finance.

Personal Contract Purchase (PCP)

Unlike HP finance, with PCP finance, you don’t own the car at the end of the finance term. Think of it more like a long-term rental. You’ll pay an initial deposit and then a series of monthly repayments. At the end of the deal, you can return the car to the dealer or trade it in for another car. Or you can pay a lump sum in order to own it outright.

Personal Contract Hire (PCH)

The monthly repayments for PCH are lower than either HP or PCP, because you don’t own the car at the end of the finance term and are never its legal owner. You will pay an initial deposit and then return the vehicle to the dealer at the end of the term.

What is a personal loan?

As well as these three main types of car finance, you can secure a personal loan. A personal loan is a loan that allows you to borrow a specific amount of money. They’re available from banks and other lenders, and are unsecured, meaning that you don’t have to put up any other assets (such as your car or your house), in order to secure them. You’ll typically repay a personal loan over a longer period than any of the other finance options, but shorter options are available.

A personal loan can be used to finance a number of things. You can use a personal loan to finance the purchase of a car, but they’re not exclusively designed for this purpose.

If you do choose to use a personal loan to finance a vehicle, you’ll have the advantage of being seen as a ‘cash buyer’ by the dealership. As a result, you shouldn’t face any balloon payment or deposit. It also means that you own the car outright and will be able to sell it as and when you want.

What is a car loan?

A car loan is a type of personal loan and, as its name suggests, it is specifically designed for the purchase of a car (or another vehicle).

As with a personal loan, you will own the car outright with a car loan, and you shouldn’t face a deposit. You just have to budget for the monthly repayments on your car loan.

Is car finance, a personal loan, or a car loan right for you?

Whether a car finance deal, a personal loan, or a car loan is the right option for you will depend upon your circumstances. There are advantages and disadvantages to all three.

There’s also no hard-and-fast rule on which type of finance or loan deal is easier to secure – it will depend on your situation and the lender’s criteria.

With a personal loan and car loan, you own the car, and aren’t subject to any mileage usage. You can also resell the car whenever you want. You just have to ensure that you repay the loan in full and remember not to miss any repayments, which would impact your credit score.

Car finance tends to be more flexible, and you can choose to terminate the agreement early or purchase the car at the end of your term (depending on what option you settle for). That said, you may face mileage or other restrictions on usage.

Get a great car finance deal

If you’ve decided that car finance is the best option for you, My Car Credit is ready and waiting to find you a great deal. We compare finance across our large network of lenders to find deals that are tailored to each buyer’s budget, credit score and other requirements.

You can apply online and get an instant decision on car finance without impacting your credit score. If you have any questions about car finance and personal loans, our team are on hand to talk you through your options, contact us today on enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Car Finance: A Complete Guide

Car Finance vs Personal Loan, what’s best for me?

Will I Get Accepted 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 options car loan Jan24 personal loan

What’s the Best Type of Car Finance for Me?

Most Brits have heard of car finance but what many people don’t understand is that not all deals are created equal. There are loads of options out there, not just in terms of lenders but also the different types of car finance available. Whether you’re shopping for a brand-new model or a used car, knowledge is everything when it comes to choosing the best type of car finance.

That’s why we’ve put together this guide designed to help make smart and informed decisions. Read on to find out more about the different options available in the UK and how to select the best type of car finance for your needs.

Hire purchase (HP)

Hire purchase loans are often offered by dealers and are designed to get you behind the wheel of your new car ASAP. The loan is secured against the car, which means you don’t own the vehicle outright until you’ve made your final payment and cleared all outstanding debts. HP loans can start with a deposit, usually at least 10% of the total value of the car, but there are plenty of options for HP no-deposit car loans. You’ll then repay the remaining balance in instalments over the loan period, plus interest. When your loan ends and you’ve paid your final instalment, the car is yours.

You’ll love HP loans if:

You have your heart set on a vehicle

If you’ve fallen in love with a model and you know you want to drive it for years to come, HP loans can be a great way to stretch your budget further and own the car outright at the end of the loan.

Your deposit is small

It’s hard to save cash which is why HP loans are so popular in the UK. Some lenders require deposits of just 10%. This gets you into the driver’s seat of a new car ASAP and allows you to spread out the total cost of the vehicle over a longer and more manageable period of time. However, you don’t always need to pay a deposit.

You might not love HP loans if:

You’re on a strict budget

HP loans offer some great benefits but they’re not necessarily the cheapest option when it comes to monthly payments. If keeping your payments to an absolute minimum is a priority, you may prefer a PCP agreement.

Personal contract plan (PCP)

Like HP loans, PCP agreements start with a deposit. After paying the initial deposit you’ll continue to make monthly instalments over the loan period. At the end of the loan, you have the option to return the vehicle or purchase it outright by making a ‘balloon payment’.

You’ll love PCP loans if:

You like to upgrade to a new car frequently

If you’re the type of person who simply has to get their hands on the latest iPhone model the day it’s released, you’ll love the concept of PCP loans.

You might not love PCP loans if:

You plan to drive long distances

Many PCP loans come with mileage limits, which means you can’t exceed a certain figure on the odometer if you want to meet the conditions of your contract.

You hate cleaning your car

As well as mileage limits, PCP loans require a certain level of commitment when it comes to TLC. You’ll need to keep your vehicle in good condition to prevent penalties at the end of your loan.

Personal loan

Personal loans are similar to PCP agreements, though there’s no option to give back the vehicle at the end of your contract. Initial deposits are generally a little larger than PCP loans, however this often means your monthly payments are smaller.

You’ll love personal loans if:

You like to keep things simple

Personal loans are simple and easy, with minimal paperwork and a straightforward structure. If you’re looking for a fuss-free loan option that doesn’t involve much number crunching, a personal loan could be a good bet.

You want to own your car outright

If you want to own your car outright with zero limits on things like mileage and wear and tear, you’ll love the freedom that comes with personal loans.

You might not love personal loans if:

You have a lacklustre credit history

The nature of personal loans means lenders are a little stricter when it comes to your credit history. If your credit score leaves something to be desired, you may not be eligible for a personal loan. But don’t worry, there are still lots of other great options out there!

You have your eye on a luxury vehicle

If you’re eyeing up a luxury vehicle, a personal loan may not secure the cash you need to purchase it outright. Most lenders cap personal loans at around £25,000, making them unsuitable for high-value vehicles.

Personal contract hire (PCH)

The term ‘hire’ says it all when it comes to PCH loans. Under these leasing agreements, you’ll rent the vehicle for a predetermined timeframe, and then return it at the end of the loan. There’s no option to buy or sell the car, making PCH agreements ideal if you love new cars but hate the idea of depreciation.

You’ll love PCH loans if:

You have an excellent credit score

PCH loans have an air of exclusivity and are usually only available to borrowers with good or excellent credit scores. If you have a glowing credit history, taking advantage of PCH loan options could be the best type of car finance for you.

You might not love PCH loans if:

You want to ‘rent to own’

If you want the option to purchase your car at the end of your loan, a PCH agreement isn’t right for you.

You’re on a strict budget

PCH loans are amazing when it comes to getting behind the wheels of the latest models. However, they can cost more than other car options and may not be the best type of car finance if you’re on a strict budget.

You plan to travel long distances

Like other rent-structured loans, PCH agreements usually place limits on mileage and wear and tear. If you want the complete freedom to use the car as you please it may be better to opt for finance that allows you to purchase the car outright.

Choosing the best type of car finance for you

All in all, the best type of car finance depends on your specific circumstances and preferences. At My Car Credit, we’re committed to finding a great deal that’s suitable for all drivers, including those looking for car finance with a poor credit rating,

If you have any questions, you can email us on enquiries@mycarcredit.co.uk or chat to a member of our friendly team on 01246 458 810.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Does Car Finance Work in the UK?

How Many Years in a Car Loan Term?

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 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 options Jan24

Where Can I Find the Best Used Car Finance Deals?

Woman looking on phone for best used car finance deals

With the potential to save thousands of pounds, purchasing a used car is one of the best financial decisions you can make. A stellar interest rate on your loan makes the savings even better. Hence, it’s worth shopping around for the best used car finance deals.

Loans can often last for several years. As such, even small variations in interest rates can make a big difference to the total cost of your overall loan. To help you unlock the biggest savings, we’ve put together a guide covering everything you need to know. Including, where to find the best used car finance deals and what to look for when shopping for a lender.

Type of finance on offer

A good lender should offer a variety of finance options. Ideally, this should include personal loans that allow you to own the car outright and sell it if needed. Personal loans are generally the most affordable option in the long term. As such, this makes them one of the most popular choices. Bear in mind, they do require separate agreements to be coordinated before making your purchase.

Hire purchase (HP) loans are another option, requiring an initial deposit and then fixed monthly payments over a predetermined time period. Personal contract purchase (PCP) loans adopt a similar concept, with the loan determined by calculating the difference between the price of the brand-new car and its estimated value when the hire agreement ends.

Flexible terms

Typically, car finance deals range from between two to seven years. The average loan lasts around six years, though ultimately your deal should be matched to your own unique needs and financial situation. As a rule of thumb, longer payment terms translate to a higher rate over the course of the loan. That said, your monthly payments will be lower as the loan is stretched out. The best used car finance deals should offer flexible terms that work for you, not the other way around.

Freedom to buy from different dealers

Not all lenders are created equal. Therefore, the best used car finance deals will offer you the freedom to buy from a variety of dealers, not just a select few cherry-picked by the lender. Looking for lenders that give you the freedom to shop around for the best used car deals is a guaranteed way to unlock additional savings.

Ease and transparency

Buying a used car should be exciting, not stressful. When shopping for car finance deals it’s worth prioritising lenders that make the process as easy and stress free as possible. Looking for a provider that offers an easy-to-use car finance calculator is a great place to start.

This small but telling feature shows you that they’re dedicated to making your experience as smooth and straightforward as possible. With the number crunching taken care of, you’re free to focus on the task at hand – choosing your dream used car.

Transparency is also a big one, with some providers really excelling in this area. Look for lenders that make it crystal clear how much the total cost of your loan will be, including extras like interest and fees. Lenders that attempt to hide these costs should automatically raise red flags.

Enlist the help of a broker

Enlisting the help of an experienced broker is one of the easiest and most effective ways to track down the best used car finance deals. With the help of an expert car finance broker, you’ll unlock access to the best available finance deals. What’s more, you’ll get personalised advice every step of the way.

My Car Credit ticks all the boxes listed above, including ease and transparency. Our approach is underpinned by a goal to make car finance online as simple and accessible as possible. As a result, we can help you buy the car you want with the best possible finance rates for your circumstances.

The company is part of Evolution Funding, one of the largest and most respected motor finance brokers in the UK. This means you’ll have access to a large panel of car finance lenders. In addition, we use specialised technology designed to match you with the best products. Exclusive to Evolution Funding, this purpose-built technology increases your chances of acceptance. Even better, it helps match you with the best products and lenders for your unique circumstances.

Ready to get behind the wheel of your dream car? Get in touch with the My Car Credit team to find out more about how you can secure the best used car finance deals in the UK. Email us on enquiries@mycarcredit.co.uk or call 01246 458 810.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is Hire Purchase? – Simple HP Explanation

How Long Does It Take to Buy a Car?

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 options Jan24 used car buying used cars

3 Benefits of Car Finance Even If You Can Buy Outright

A mistake that motorists often make is to assume that they don’t need car finance because they have the cash in their bank accounts. If you’re in the market for a new motor, you might not know whether it’s better to buy a car outright or with finance since there are pros and cons of each.

While buying outright seems the obvious choice, it’s well worth considering the latter option since finance deals provide many more features that you might not have factored into your decision. After all, it’s easy to focus on one dimension. Read on as we look at three benefits of car finance even if you can buy outright.

Spreading the cost

Paying a lump sum amount upfront isn’t always a savvy choice, especially if you don’t have the liquidity to react to emergencies. Picture the scene. You’ve just purchased a car with your savings and own it outright. But the week after, your boiler breaks down and you need to splash the cash again to fix it.

The average person can’t afford to keep on throwing substantial amounts of money around, particularly if it’s the end of the month. Thankfully, using car finance means you can spread the cost of the car over an extended period, letting you pay off the full amount monthly. As a result, you can keep the extra cash in your emergency fund for an inevitable rainy day. Our car loan calculator even helps you to crunch the numbers beforehand so that you know exactly how much you’re paying per month.

Flexibility

Of course, not every car deal goes to plan. When you own a vehicle, there’s nothing you can do about it if you fall out of love or the motor isn’t what you wanted. In short, you’re stuck with an expensive asset. Car financing is different as there are several options at your disposal.

For example, Personal Contract Purchase deals (PCP) are designed to give you the option to sell your vehicle back to the dealer at the end of the contract. With a balloon payment, you can either decide to pay it off in full or hand it back. If you do the latter, you can upgrade to a newer model, making PCP an excellent way to drive a different vehicle every couple of years. Alternatively, Hire Purchase (HP) lets you decide how long you want to pay back the loan. It could be three years or five, depending on the premiums and your disposable income.

More freedom

There’s a wide array of cars to choose from, and you don’t want your budget to get in the way. When you rely on your savings, this is bound to happen because you will find makes and models that are out of your price range. It doesn’t matter whether it’s £100 or £1,000 as you can’t magically generate the funds out of thin air.

With car financing options, your budget is greater because you can spread the payments out more, which means you can generally afford more. Therefore, you’ll be less likely to be bound to your budget if you come across a dream vehicle that is more expensive than you anticipated.

Car finance vs buying outright

If you’re stuck between buying a car outright or financing, the experts are My Car Credit can help you get a clearer idea of the finance options at your disposal. Working with a large network of leading lenders, we can find you a great finance deal that’s tailored to your circumstances and requirements. Don’t hesitate to call our team to find out more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

7 Advantages of Used Car Hire Purchase

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

PCP Term: Everything You Need to Know

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 options Jan24 payment options

Can I Take Over Someone Else’s Car Finance?

Car finance is becoming an increasingly popular method for people looking to buy new or used cars. It’s easy to see why – by paying the car off in a series of affordable monthly payments, the whole process becomes far more manageable and cost-effective.

At My Car Credit, we’re often asked whether customers can take over somebody else’s car finance. Below, we give you the lowdown on that. What’s more, we provide recommendations for finding both a new set of wheels and a car finance deal that suits your budget and needs.

Can I take on a car with outstanding finance?

Unfortunately, taking on a car with outstanding finance isn’t possible. If a car has remaining fees on it, it technically still belongs to the lender, which means a private seller can’t sell it on. The original seller will have to settle the outstanding balance before selling the vehicle on – if they don’t, they could face severe penalties.

They can do so by contacting their original finance company and asking them for a settlement figure. Once this has been paid, the car is then legally theirs to sell on, which means that you’re free to purchase it. But is it possible to get car finance on private sales?

Car finance for private sales

Many people assume that you can get car finance for private sales much like you would with a dealership. Whilst there are lenders who can help with car finance on private sales, they often require more paperwork and reassurances. Alternatively, you could take out a personal loan to pay for the car upfront. Instead of providing car finance on private sales, we advise searching for your new set of wheels via a reputable UK dealer.

There are so many advantages to going down this path. Finding a vehicle via a dealership doesn’t necessarily mean you’re paying for a brand-new car – you can unearth some excellent nearly new and used cars in our one-stop shop of recommended dealerships. We’ve vetted over 4,500 nationwide car dealers for their service standards and financial stability. Hence, you can rest easy knowing that you’re in good hands.

Choosing a car through one of these motor dealers also helps when it comes to applying for My Car Credit car finance (although you can get a car from any reputable dealer). Our friendly team of car credit specialists will support you throughout your application process. In addition, we’ll offer expert advice and guiding you through every step of the way.

Plus, with our system, the rate you see is the rate you get – there’ll be no hidden fees or costs for you to worry about. Our online application process takes mere minutes to find a rate that suits your individual requirements. This means you can get behind the wheel with peace of mind.

Contact us today

My Car Credit is committed to making the process of finding car finance more affordable, accessible, and quick. You can use our car finance calculator to discover your options, or contact one of our friendly team today on 01246 458 810.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is a Balloon Payment on a Car Loan?

How Do Balloon Payments Work?

Can You Modify a Car on HP 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 options take over take over finance

Can You Finance a Car from a Private Seller?

Car purchased via a private sale being driven at night

If you’re searching for your next nearly-new or used car, there are a number of places you can look. From Auto Trader to Gumtree and even Facebook Marketplace, sourcing your next vehicle via a private seller may seem like a breeze – but can you finance a car from a private seller?

When you buy your car via private sale, you may benefit from more affordable overall price points. However, the financing process for private sale is more complicated.

Plus, when you access car finance through a dealership rather than an individual seller, you’ll gain access to a range of financing agreements offered either by the dealership itself, car finance companies or brokers like My Car Credit.

This guide will review everything you need to know when it comes to car finance for a private sale. We’ll cover the risks of financing a car from a private seller, helping you find a better, safer route to car ownership.

What is private car finance?

Private car finance allows you to borrow money to buy a car from an individual private seller rather than a dealership.

With private car finance, the lender pays the seller directly. As the car’s purchaser, you’ll then repay the lender in installments.

Typically, private car finance agreements require more paperwork and background checks than non-private car finance. These checks can include confirming the vehicle’s mileage and checking its V5C, as well as ID verification and a vehicle history check (HPI). The checks are carried out to confirm that the vehicle is legally available for sale and doesn’t have any outstanding debt still attached to it.

Certain lenders do offer ways of financing a car from a private seller. However, not all finance providers offer this option. You may therefore need to arrange alternative forms of finance – such as a personal loan – if you’re looking for private car finance.

Be aware that when you’re buying a car in a private sale, you won’t benefit from the same level of cover or protection offered through other car finance providers, including dealerships and brokers like My Car Credit.

Dealerships can also offer guarantees or warranties as part of their car finance offerings, which you won’t receive via private sale car finance.

At My Car Credit, we only work with a network of trusted dealers. That ensures our car finance options are secure, supported and flexible – especially compared to loans you’ll find for private vehicle sale.

Is it possible to finance a car from a private seller?

Some car finance lenders offer private sale car finance.

However, any company providing a car loan for a private seller will want to conduct a thorough check of the vehicle to confirm that it’s entirely legal for sale. In other words, you’ll face more restrictions for private sale car finance compared to car finance secured via a dealership or other financial institutions.

The types of restrictions you can face when looking for private sale car finance include:

Stricter checks on the vehicle itself, including of its mileage and the V5C logbook
More thorough HPI inspections – which you might need to arrange yourself
Less buyer protection compared to non-private sale car finance

Many car finance brokers – including My Car Credit – do not currently offer finance for private sellers. Here’s why…

Why most finance providers avoid private seller car loans

Many auto finance institutions avoid private sale car finance for a number of reasons.

The condition of the vehicle for sale may be unclear, with limited comeback if there’s a problem.

Unlike dealerships, private sellers also offer no guarantees or warranties. Plus, because the seller process isn’t FCA-regulated, there’s less buyer protection and payment security, meaning you’re at a higher risk of fraud.

Lenders also take on more risk when they finance a car loan for a private seller. As the vehicle’s buyer, this can lead to higher interest rates for you, or a higher risk of eligibility refusal in the first instance.

Can you privately sell a car on finance?

You cannot legally sell a car if it has outstanding finance on it. You don’t technically own the vehicle until the final finance repayment has been made – the lender is still its legal owner.

As such, if you sell the car without clearing the finance and any outstanding fees in full, selling it privately is illegal and could even lead to repossession.

If you have plans to privately sell your financed car, contact your finance provider. They should be able to offer you a settlement figure – also known as an early exit fee – which is the amount you can pay to end your finance agreement early.

What happens if I sell a car with outstanding finance?

If you privately sell a car with outstanding finance on it without telling your finance provider, you’ll face consequences.

You may face legal consequences for misrepresenting the car’s ownership. The vehicle’s new buyer also risks losing the car if the lender reclaims it.

There are ways to return a financed car. That said, you should always settle the finance in full before selling it on, or use a dealership to ensure you trade it in legally.

A better alternative: finance a used car from a trusted dealership

With My Car Credit, you can benefit from securing your next nearly-new or used car and your car finance in one go.

Our one-stop shop of pre-approved, quality used vehicles will grant you access to great deals on nearly-new vehicles from trusted dealerships.

With an extensive network of vetted partners across the UK, we’ll give you access to competitively priced used vehicles. That way, you enjoy greater protection and warranties, and will benefit from regulated support throughout the process.

Plus, with car finance from My Car Credit, you’ll be offered a no-obligation quote that’s tailored to you. We work with the UK’s largest panel of lenders, and won’t use pushy sales tactics or confuse you with hidden fees.

We’ll also offer you soft search pre-approval, meaning it won’t impact your overall credit score.

The benefits of dealer-based car finance with My Car Credit

Compared to a car loan for a private seller, you can expect to benefit from our car finance in the following ways:

Safer transactions – With regulated sellers, you benefit from legal protections
Wider choice of lenders – We’ve got the broadest lender panel of any UK broker, meaning you face a better chance of approval
Expert support – We handle all paperwork and negotiations, offering professional support and advice throughout the application process
Faster decisions – Our application process is all online, so you get results quickly
Peace of mind – Car finance from My Car Credit means you benefit from warranties, MOT checks and return options

How our online car finance process works

Step 1: Apply Online

Complete our online application form in mere minutes, outlining your circumstances and the type of agreement you’d benefit from
An initial soft search means no impact on your credit score

Step 2: Get a Personalised Offer

As part of the UK’s largest motor finance broker, we’ll find the best deal for your credit profile

Step 3: Choose a Car from Our Network

Use our My Car Search to find used cars from trusted, approved UK dealers

Step 4: Drive Away Confidently

Secure, simple, stress-free – take to the road in ease and style

Private seller car finance FAQs

Can you finance a car from a private seller?

Some car finance providers do offer private sale car finance. In order to ensure the total legality of the sale, remember that you’ll face more background and vehicle checks if you opt for a car loan for a private seller.

Why is private car finance riskier?

Private car finance is riskier because you won’t benefit from the same level of buyer protection or payment security offered in dealer- or broker-based car finance. Plus, with car finance from a provider like My Car Credit, you can take advantage of other advantages like guarantees or warranties, too.

Can I still get finance for a cheap used car?

Many car finance providers offer car finance for nearly-new and used cars. At My Car Credit, we offer fast and fair used car finance for drivers with all credit profiles and vehicles at different price points.

What if I have bad credit?

Poor credit car finance is offered by many car finance providers, including My Car Credit. We’ll consider all circumstances, combining a wide panel of trusted lenders with a sensible approach to help you find the most suitable agreement for your needs.

What’s the alternative to buying privately?

You can secure your next car from trusted dealerships or vetted resources like our My Car Search. You’ll benefit from expert support and access greater buyer protection, warranties, and guarantees compared to buying privately.

Ready to finance your next car the smart way?

Securing a car loan for a private seller is possible with some car finance providers. At My Car Credit, we don’t support private sale car finance due to the associated risks and lack of buyer protection.

Dealer-based car finance with us is a safer, simpler and more supported option. Use our car finance calculator to discover the kind of agreements you could benefit from, or kickstart your application today by filling in our online form.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Balloon Payments Explained: What, Why & How

How Many Years in a Car Loan Term?

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

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 options private private sale

5 Different Ways to Pay for a Car

white car in dealership being bought using a car loan

Once you have taken a test drive in your shiny new motor, it can be tempting to throw caution to wind and not worry too much about how you’re going to pay for it. Unfortunately, this is all too common for car owners across the UK. Before you sign on any dotted line, you should know how you aim to pay for the vehicle, whether you decide to hand over cash or take out car finance.

If you’re in the market for your next ‘new-to-you’ vehicle, take a look at the different ways to pay for a car.

How to pay for a car

Cash
As long as you’d have enough savings left over to cover other major purchases or unexpected costs in the future, paying cash is a great way to buy a car. Paying cash means that you own the vehicle straight away. If you get into financial difficulties, you have the option to sell the vehicle and keep the cash from the sale. If you have a car finance agreement such as a leasing or hire purchase, this isn’t possible.
If you don’t have quite enough savings to buy the car outright, you could use them to give you the biggest deposit possible, so you end up spending less on loan interest.
Before you pay cash, think about your future finances. Are you planning any other large purchases over the next few years, such as buying a house? If so, you may want to save some cash and consider financing the vehicle.
Hire Purchase
This option is increasingly popular for the purchase of new cars. Typically, you will put down a deposit of 10%, and then make fixed monthly payments over an agreed time period. This means that you won’t own the vehicle until the last payment has been made. However, this route does make purchasing a vehicle more manageable. Even those motorists with poor credit can get accepted for car financing.
Hire purchase agreements are convenient to arrange and can be competitive for newer vehicles. There is also a fixed interest rate and monthly payments with no annual mileage conditions or fines for wear and tear.
Personal Contract Purchase (PCP)
This type of car finance deal is similar to a hire purchase agreement, but you usually make lower monthly payments. With a personal contract purchase, you have an ‘optional final payment’ at the end of the car finance plan, often referred to as the ‘balloon payment.’ You are able to defer some of the cost of the car to be paid at the end of the plan, making the monthly payments cheaper.
Instead of getting a loan for the total cost of the car, you get a loan for the difference between its sale price and its predicted value at the end of the hire agreement.
In a PCP, you decide how much of a deposit you want to make and estimate your annual mileage and the length of the contract. Typically, this type of car finance plan is between 3 and 5 years.
At the end of the term, you can:
• Trade the car in and start over again;
• Hand the car back to the dealer and pay nothing; or
• Pay a final payment (balloon payment) and keep the vehicle.
Conditional Sale
A conditional sale is similar to a hire purchase agreement, but you pay higher monthly payments and don’t have a fee to pay at the end of the term. Like a hire purchase, you do not own the car until the car finance plan has been paid in full. Typically, you put down 10% of the car’s value as a deposit, and repayment terms last between 2 and 6 years, making this option ideal for those who want to keep the car at the end of the plan without paying a final fee.
Credit Cards
Using a credit card to buy your new car can be a cost-effective way of getting a new set of wheels that allows you to buy the car outright on the day. To buy all or a portion of a car with a credit card, you must first ask the dealer if they accept credit card payments as many do not. If they do, they could charge a hefty processing fee that you need to consider.
It is best to use a credit card that has a 0% interest offer to buy the car outright and then split the repayments over the interest-free period so that the balance is cleared by the time you’re due to be charged interest.
Putting your new car on a credit card gives you repayment flexibility as long as you meet the minimum payment every month. However, if you only repay the minimum repayment every month, it may take much longer to repay your borrowing amount.

Getting a car on finance? Here’s what to look out for

Before you take out a car on finance, here are a few things to look out for:

• Make sure you can afford the monthly payment – not just now, but for the whole term of the loan.
• Ask the lender what will happen if you struggle to pay one month, and what options you have if you couldn’t afford to pay.
• Compare the total cost of borrowing, including all charges over the full term of the loan.
• Compare interest rates from different lenders. Remember that a larger deposit usually means you have a lower interest rate.
• Consider working with car credit specialists to land the right finance plan.

Find out if you can get car finance

At My Car Credit, we aim to help you through every step of the car finance process to make the process as hassle-free as possible.
For an instant quote, and to see what car finance plan you can be eligible for, please use our simple car finance calculator.

We are open 7 days a week, and our website is full of helpful tips, guidelines and answers to any questions you have.
For more information, call us on 01246 458 810 or email us at enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is a Guarantor Loan?

Who is the Legal Owner of a Car on 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 options car loan cash credit card hire purchase Jan24 PCP

Can I Pay a Car Loan with a Credit Card?

Woman paying her car loan using a black credit card online

Buying a car can be expensive. When you're in the market for a new or used vehicle, it's smart to shop around to ensure you're getting the right car at the best price. Part of this is considering whether to use car financing.

Unless you have enough cash stashed away to pay for your new ride, you’ll need a personal loan or car financing to complete the purchase.

If you’re feeling adventurous, you may be tempted to purchase the car through a credit card. But can you buy a new car with a credit card? Will you have to pay interest? They’re both good questions – here’s what you should know.

Can I buy a car with a credit card?

Since the Consumer Credit Act of 1974, there have been a lot of changes to the options consumers have when using a credit card. So, the simple answer is yes – you can purchase a card with a credit card. But before you do, you should find out if the dealership even offers that option.

A good early question is whether or not they accept credit cards. Most of the time, they won’t let you charge the entire purchase price of your car. Some dealers will have a limit on the value of an individual purchase, so check before you sign up.

The process of buying a car on a credit card is the same as buying anything else on a credit card. The full amount is charged to the card, and then you pay the credit card company back over time while paying interest on the outstanding amount.

Unlike some other loans, you won’t have to pay a set amount each month. This gives you more freedom to choose how much you pay back each month, as long as you meet the minimum monthly direct debit payments.

Are there downsides to buying a car on credit?

As mentioned previously, certain car dealerships may not accept credit cards as complete payment for a car purchase. If a dealership does accept credit card payments, be aware that there may be a surcharge, which is often an unexpected expense.

If you don’t qualify for a 0% rate with a credit card provider, keep in mind that the typical APR rate is 10-15%, which is higher than a typical bank loan. Since most 0% deals also only last a couple of years, it would be best to either pay off the card before the 0% offer ends or transfer the balance to another card. In this case, it can be difficult and time-consuming to keep on top of it to avoid unnecessary fees or unwanted credit card debt.

Top Tip: If APR is new to you, read our guide on car loan APR.

When should you consider buying a car with a credit card?

If you’re thinking about buying a new or used car with a 0% interest rate offer, then it can make sense to charge it to your credit card. Before you go this route, however, make sure you can afford to pay off your car quickly. If you don’t, you may end up paying standard APR rates – which are higher than the rates you’d receive from a good car financing company.

Secure, reliable car financing

While you can buy a car with a credit card, doing so isn’t always the right decision. With My Car Credit, securing reliable and affordable car financing has never been easier.

We’re a fully FCA-compliant credit card company, so our customers know exactly what they’re getting from us. We work with a range of motorists to find the right finance plan that suits their needs, from people with poor credit to those who are self-employed.

To get started on your tailored car financing, use our free car finance calculator and then apply to get a decision on car finance without impacting your credit profile. We look forward to working with you to help you pay for your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Much Does Car Finance Cost? Check Now!

Car Finance or Personal Loan – Which is Best for You?

7 Advantages of Used Car Hire Purchase

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 options car loan credit card Jan24

Can I Buy a Car Using a Credit Card? (Updated for 2025)

Man handing over blue credit card to buy a car

It's one of the most common car-buying questions in the UK – can I buy a car with a credit card? Whether you're eyeing up a shiny new set of wheels or planning to upgrade your current runaround, it's easy to see the appeal. With 0% interest offers, cashback rewards and the added protection of credit card purchases, it can seem like a smart way to fund a major purchase.

After all, the idea of racking up enough points for your next holiday just by buying a car? Tempting. And we can’t deny, sipping a cocktail you technically earned via your car’s alloy wheels does have a certain appeal.

But is it really that simple? Well, yes and no. While it’s technically possible to buy a car using a credit card, it comes with some pretty big caveats. In fact, many buyers find that traditional car finance offers more flexibility, structure and long-term savings than sticking it on plastic.

Here’s everything you need to know about buying a car on a credit card in 2025, plus why car finance might be a better fit for most drivers.

Can you really buy a car with a credit card in the UK?

Short answer – yes.

Long answer – not always…

Plenty of UK car buyers ask this question, especially when tempted by a 0% interest deal or a shiny new rewards card with bucketloads of points. And while using a credit card to pay for a car is possible, there are some fairly strict conditions attached.

So, when does it work?

The answer to can you pay for a car on credit card depends on three key things:

The seller

Not all dealerships accept credit cards, especially for full payment. Some allow it for deposits only. Private sellers rarely accept cards at all.

The amount

Larger purchases may exceed your credit limit. Some dealers may cap how much you can pay via card, such as £500 or £1,000.

Your card provider and limit

A credit limit of £10,000+ isn’t guaranteed, even if your income is healthy. And if you do have a high limit, you’ll need to manage your utilisation carefully.

In most cases, credit cards are accepted for deposits only, rather than the full amount. But this can still be useful if you want to buy a car with a credit card, as you’ll see in the next section.

Why pay for a car using a credit card?

Despite the hurdles, there are a few reasons some buyers still consider using a credit card. Either for the full amount (when allowed) or just the deposit. Here’s where it can work in your favour:

Section 75 Protection

If you use your credit card to pay for even part of a purchase costing between £100 and £30,000, you may be protected under Section 75 of the Consumer Credit Act. That means if something goes wrong (say the dealership goes bust before delivering the car), your card provider is equally liable.

Cashback, points or rewards

Some cards offer cashback or reward points on purchases. For big spends like a car, this could add up quickly. Assuming you pay it off in full before interest kicks in.

0% interest introductory offers

Many credit cards offer an introductory 0% interest period on purchases (sometimes up to 18–24 months). This can make short-term borrowing free, if you’re confident you can repay the balance in time. Of course, most borrowers let their debt sit for a while, which means interest can catch up when you buy a car on credit card.

Flexible repayments

Unlike car finance (which comes with fixed monthly repayments), credit card spending is more flexible. You can overpay one month, underpay the next. Although as convenient as it sounds, this can be a double-edged sword (see next section).

What are the downsides of buying a car on a credit card?

For all its perks, using a credit card to buy a car can backfire. Especially if you’re not careful with repayments.

High interest rates

Unless you clear the balance before your 0% offer ends, credit cards typically charge 19-25% APR or more. This is far higher than most car finance deals. So that “cheap” car could end up costing much more over time.

Not always accepted

Many dealerships either don’t accept credit cards or impose limits on how much you can put on one. If they do accept it, there may be a surcharge (typically 1-3%) that eats into any cashback or rewards.

Credit limit constraints

Most people don’t have a high enough credit limit to cover an entire car purchase, especially for newer models. You also risk hurting your credit score if your balance-to-limit ratio (credit utilisation) shoots up. Limits are why most Brits don’t opt to buy a car with a credit card.

No structured repayment plan

Flexibility is great in theory, but it can lead to poor financial habits. Without a set repayment plan, it’s easier to fall behind or carry a balance for longer than you intended.

Potential credit score impact

Large purchases can reduce your available credit, increase your utilisation ratio and raise red flags for future lenders. Maxing out your credit card now might seem like a good idea, but it could affect your eligibility if you apply for car finance or a mortgage later on.

What if a dealer won’t accept a credit card?

In reality, most main dealers won’t allow full payment by credit card. And even if they do, they may tack on extra fees that will offset any potential benefits. Some will allow a small portion of the payment (like a £500 or £1,000 deposit) to be paid via card, and the rest by bank transfer, loan or finance.

So what can you do?

Always check with the dealership before committing – Don’t assume you can use your card. Confirm their policy first.
Use your card for the deposit only – So long as the payment is over £100, you’ll still unlock Section 75 protection without needing to charge the full amount.
Split the payment – In some cases, you might use part credit card, part car finance. This gives you the best of both worlds.
Ask about alternative payment methods – Some dealers might accept debit cards, bank transfer or finance arranged through a third party like My Car Credit.

Things to consider before buying a car with a credit card

It’s tempting to reach for the plastic, especially when there’s a shiny 0% offer on the table or a huge points bonus. But before you buy a car with a credit card, ask yourself the following:

Can you repay the balance before interest kicks in?

If not, it could cost far more than you bargained for.

Will the dealership charge a fee?

Even a 2% surcharge on a £15,000 car is £300. In other words – more than most reward schemes will give you back. Be sure to crunch your numbers carefully before you get won over by a supposed deal.

Is your credit limit high enough?

And if it is, can you still afford to keep your utilisation low (ideally under 30%)?

Will a large credit card balance impact future borrowing?

Big spending now could hurt your chances of a good mortgage or loan later. If you’re planning to make an even bigger purchase down the line, it could be worth protecting your credit score now so you can benefit later.

In fact, alternative options like car finance (especially those with structured, on-time repayments) can actually help build your credit score over time and show lenders you’re a reliable borrower.

Is there a cheaper, more manageable alternative?

Finance deals often come with better rates and clearer payment plans.

Alternative ways to buy a car in 2025

Choosing to buy a car with a credit card can work in very specific circumstances. The reality? Most UK drivers will benefit more from a structured finance option. And even better, most UK drivers are eligible. Yes, even those with poor credit.

These give you clarity, predictability and often better value, especially over the long term.

Hire purchase (HP)

Pay a deposit, then monthly instalments. Once all payments are made, you own the car outright. It’s simple, transparent and ideal if you want full ownership at the end.

Personal contract purchase (PCP)

Typically comes with lower monthly payments than HP. You have the option to buy the car at the end (by paying a final “balloon” payment), return it or trade it in.

Personal loans

If you prefer to own the car from day one and don’t want to go through a dealership finance plan, a personal loan could be a good option. Note: your chances are better with strong personal credit.

All of these alternatives offer clearer repayment terms, more competitive interest rates and usually less stress than relying on your credit card.

Want to know where you stand when it comes to finance? With My Car Credit, you can compare your options easily and check your eligibility using our soft search tool, with absolutely no impact on your credit score.

Worried about your credit score? Don’t be. Chances are, we can help. We work with a wide network of lenders to find matches for applicants with all types of credit scores, from squeaky clean to less-than-perfect.

Should I buy a car on a credit card or use finance instead?

Still tossing up between credit card vs finance. Let’s recap the key pros and cons:

When credit cards might work:

You have a 0% interest offer and can repay quickly
You’re paying a small deposit to unlock Section 75 protection
You want to earn rewards (and the maths still adds up after any fees)
You have a high credit limit and are confident managing large balances

When car finance is the better option:

You need to spread the cost over time without risking high interest
You want predictable monthly payments
You’re buying a more expensive car and need a larger credit facility
You’d rather have a structured repayment plan that fits your budget
You want help from a provider that specialises in car finance

Get car finance that works for you

Choosing to buy a car with a credit card can work in some cases, but it’s rarely the most efficient or affordable route. At My Car Credit, we help you explore car finance options that are tailored to your needs, whether you’ve got excellent credit or you’ve hit a few bumps along the way.

You can use our car finance calculator to get a rough idea of your monthly payments, or check your eligibility with no impact on your credit score thanks to our soft search tool.

Easy online process
Flexible deals for all credit types
Used and new car finance available
Supportive team to guide you every step of the way

So… can you pay for a car on credit card in the UK? Yes, sometimes. But just because you can doesn’t always mean you should. Between card limits, surcharges and sky-high interest rates, there are plenty of reasons to consider dedicated car finance instead.

At My Car Credit, we’re here to help you make the smartest decision for your situation. No pressure, no jargon and no confusing terms. Just honest advice and car finance that fits your lifestyle.

Apply today and let’s get you behind the wheel.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Financing a Second-Hand Car: 4 Options

Bank Loan or PCP: Which is Right for You?

How Does Auto Finance Work?

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 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.240, total amount payable is £9,676.24.

My Car Credit is a credit broker and not a lender.

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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 options credit card finance options Jan24

Scenarios where used car finance steps up

Understanding loan types for used cars

Can you pay monthly for a used car?

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When you secure a car on finance, you’re borrowing money in order to pay for your new vehicle. You’ll then repay this loan via a series of pre-agreed monthly instalments.

What are the different types of car finance available?

What is a personal loan?

What is a car loan?

Is car finance, a personal loan, or a car loan right for you?

Get a great car finance deal

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Hire purchase (HP)

Personal contract plan (PCP)

Personal loan

Personal contract hire (PCH)

Choosing the best type of car finance for you

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Type of finance on offer

Flexible terms

Freedom to buy from different dealers

Ease and transparency

Enlist the help of a broker

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A mistake that motorists often make is to assume that they don’t need car finance because they have the cash in their bank accounts. If you’re in the market for a new motor, you might not know whether it’s better to buy a car outright or with finance since there are pros and cons of each.

Spreading the cost

Flexibility

More freedom

Car finance vs buying outright

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Car finance is becoming an increasingly popular method for people looking to buy new or used cars. It’s easy to see why – by paying the car off in a series of affordable monthly payments, the whole process becomes far more manageable and cost-effective.

Can I take on a car with outstanding finance?

Car finance for private sales

Contact us today

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If you’re searching for your next nearly-new or used car, there are a number of places you can look. From Auto Trader to Gumtree and even Facebook Marketplace, sourcing your next vehicle via a private seller may seem like a breeze – but can you finance a car from a private seller​?

What is private car finance?

Is it possible to finance a car from a private seller?

Why most finance providers avoid private seller car loans

If you’re searching for your next nearly-new or used car, there are a number of places you can look. From Auto Trader to Gumtree and even Facebook Marketplace, sourcing your next vehicle via a private seller may seem like a breeze – but can you finance a car from a private seller?

Can you finance a car from a private seller?