car loan Archives - Page 2 of 3

What is the Average Car Loan Interest Rate?

Flexible and affordable, auto finance is one of the most popular ways to purchase a car in the UK. A good understanding of the average car loan interest rate is one of the best ways to make smart and informed decisions when choosing a lender.

In this article, we’ll take a closer look at benchmark car loan interest rates in the UK, as well as exploring the difference between the Bank of England rate, cash interest rate and APR (annual percentage rate).

Britain’s relationship with car loans

Brits love to borrow. According to the Finance and Leasing Association (FLA), over 90% of all cars are bought on finance in the UK, and in the twelve months leading to May 2024, over two million cars were purchased on finance.

With so many benefits on the table, it’s no surprise auto finance is such a popular option in the UK.

What is the average car loan interest rate in the UK?

Different lenders will offer different interest rates for car loans – you can compare between the lenders My Car Credit works with to find the right rate for you.

Bank of England interest rate

The Bank of England interest rate – also known as the Bank Rate – affects the industry rates that lenders charge for different types of credit, including car finance.

It’s reviewed eight times a year to reflect the UK economy. As of February 2025, the Bank of England interest rate is 4.5%.

Most lenders take this base rate, then add to it based on a variety of factors. It’s rare to find any type of loan, whether it’s a home mortgage, cash loan or auto finance agreement, that uses the base interest rate stated by the Bank of England.

Cash interest rate

This is the interest rate the lender chooses to use on the principal loan amount. For example, if you borrow £10,000 at an interest rate of 6%, you’ll be paying an additional £600 in the first year. It describes the cost of borrowing the money itself and doesn’t include any fees or charges added by the lender. Using a car finance calculator is a quick and easy way to crunch the numbers.

Annual percentage rate (APR)

APR offers a more comprehensive view of the total cost of your loan. As well as the cash interest rate it also includes extra fees and charges. For example, if you’re offered a car loan with a cash interest rate of 7%, but the APR is 12%, you’ll be paying 5% in fees.

APR is designed to provide transparency to borrowers and make it as easy as possible to calculate the total cost of your loan. Comparing APRs offered by different lenders is one of the best ways to secure a good deal on car finance.

What is a good APR rate for a car?

APR varies significantly between lenders. That said, it must be disclosed prior to signing any paperwork, so you can shop around and compare these rates when you’re looking for car finance.

Remember that there’s a difference between representative APR and exact APR.

In the UK, borrowers with excellent credit scores should aim for an APR of 10.9%. This is considered a good average car loan interest rate, allowing you to enjoy the benefits of auto finance without absorbing too many extra fees or charges.

That said, this rate will be determined by your individual circumstances, especially your credit score. The lower your credit score, the higher your APR is likely to be. There are other ways to reduce the APR on a car loan too, including applying with a guarantor and choosing a shorter repayment term.

If your credit score is less than ideal, don’t forget that My Car Credit helps with poor credit car finance.

Fixed vs variable interest rates: What’s the difference?

A fixed interest rate remains constant for the entire term of a loan, meaning your monthly payments stay the same. Most auto loans in the UK come with a fixed APR.

A variable interest rate means your monthly interest payments can change, so they’re less predictable.

Choose an auto loan with a fixed interest rate if you want to know how much you’ll pay each month and don’t want to be affected by fluctuating interest rates. Be aware that fixed rates tend to be a bit higher than variable interest rates.

A variable interest rate makes it easier to switch deals or providers early compared to a fixed interest rate. However, your payments will be less predictable, making it harder to budget.

Is a low APR always the best deal?

Low APR means you’ll pay lower average percentage rates compared to the rates on standard auto loans. It’s ideal for buyers with higher credit scores.

However, always do your diligence and read the fine print before jumping for low APR auto finance. Sometimes these offers can come with hidden fees like a minimum deposit requirement, or even vehicle usage restrictions.

You should also understand your total loan cost and ensure your lender is totally trustworthy before agreeing to a low APR deal.

If you have questions about whether a low APR deal is right for you, you can always contact our friendly team of Car Credit Specialists with your questions and concerns.

Get a great car loan deal with My Car Credit

Why settle for an average car loan interest rate when you could unlock an even better deal?

At My Car Credit, we’re committed to helping Brits secure best-in-class APR, with a representative rate of 10.9% – though rates will vary depending on your unique circumstances.

Unsure what kind of APR you might benefit from? Fill out our online form to get a no-obligation quote in minutes and discover the kind of rates and terms you can secure with a car loan from My Car Credit.

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

Why Was I Denied a Car Loan with Good Credit?

A good credit score can feel like a gold star on your financial history report. But unfortunately, a good credit score doesn’t guarantee approval when it comes to car loan applications. If you’ve been denied a car loan with good credit, this article is for you.

Below, we go into more detail about why a good credit score isn’t the be-all-and-end-all for car loan applications. We also take a look at how to overcome the hurdle, and what you can do to increase your chances of securing finance with a trusted lender.

What is a credit score?

Before we start, it’s important to define what a credit score is and why it matters. Basically, a credit score measures the overall health of your financial situation. A high score presents you as a reliable and trustworthy borrower, while a low score indicates a higher level of risk and an increased chance of defaulting on your loan. The higher your score, the more appealing you are to lenders.

Scorecards are used to calculate your credit score and create an overall picture of your borrowing behaviour. Information like your credit card repayment history and previous credit applications, as well as factors like your electoral roll status and address history, can affect your credit score. That said, your credit score isn’t the only factor considered by lenders when assessing car loan applications. This means you may be denied a car loan with good credit.

Good vs poor credit history with Equifax, Experian and TransUnion

In the UK, three major platforms are used to calculate credit scores – Equifax, Experian and TransUnion. All use a different number system, so don’t worry if your credit score varies between platforms.

Equifax: 0 – 1000
Experian: 0 – 999
TransUnion: 0 – 710

Experian classes 881-960 as good, while TransUnion’s threshold is 604-627 and Equifax goes as low as 420-465. As you can see, a good credit rating with one credit agency doesn’t mean you’re always classed as low risk. It depends which agency is used by each lender.

What doesn’t affect a credit score?

Credit scores are used to assess your financial history and give lenders an idea of your reliability when borrowing money. They’re not designed to reflect your overall wealth or purchasing power. The following criteria aren’t considered when calculating your credit score, however they may help explain why you were denied a car loan with good credit.

Student loans
Savings account balances
Employment history
Parking tickets or driving offences
Criminal record
Medical record

Reasons why you may have been denied a car loan with good credit

If you’ve been denied a car loan with good credit, here are some common reasons to consider. They don’t affect your credit score directly, but they can have an impact on the final decision of the lender.

Financial links

It’s important to understand that you’re not necessarily the only person assessed when applying for car loans. Financial connections to irresponsible borrowers, such as partners, family members or flatmates, can have an impact on your success rate and may help explain why you’ve been denied a car loan with good credit.

For example, if your legal partner has a lacklustre borrowing history and a poor credit score, this can impact your chances of a successful application. Even if you’re no longer together, they’re still considered a financial risk. Similarly, if you once shared utility bills with an irresponsible ex-flatmate, their borrowing behaviour can have an impact on your car loan application.

These types of financial links won’t affect your personal credit score, but they may be considered by lenders when assessing applications and calculating the overall risk factor. Lenders may check the credit reports of these individuals and use data to make a final decision on whether to approve or deny your application.

Check the Financial Associations section in your Credit Report to find out if you have any links. Depending on whether the connection is still active, it may be possible to submit a disassociation request and remove the person from your Financial Associations list.

Employment status and salary

The ability to repay your loan is a major factor considered by lenders. They won’t hesitate to follow up on employment and salary information stated in your application, and if the numbers don’t match up, your loan may be declined. This means that even with a stellar borrowing history, you may be denied a car loan with good credit if your employment status and income can’t be verified.

Another issue in this respect comes when you’re self-employed. While it’s great to work for yourself, this can negatively impact your ability to get car finance because it’s less secure than income from an employed position. Working for yourself, your salary can fluctuate month to month and year to year, making it harder for finance companies to assess affordability – which brings us onto…

Affordability

One of the most important factors for any finance company is affordability. Lenders want to know whether you can afford the repayments based on your current circumstances. While your credit rating reflects your history with finance companies, it’s also important to consider your incomings and outgoings.

As well as your salary, they’ll look at existing financial commitments like mortgage payments, utility bills and personal loans. If you’re already in financial difficulty, regardless of your credit history, you could be refused car finance.

Inconsistency in applications

Lenders don’t just check your current application. They may also cross-reference it with previous applications. Inconsistencies can raise instant red flags and may explain why you’ve been denied a car loan with good credit. For example, an application that states a £100,000 salary preceded by an application that states a £30,000 salary may be flagged.

Existing debt

Current debt isn’t factored into your personal credit score. However, it may be considered by lenders when assessing car loan applications. Ultimately, they want to be sure you can repay the amount you borrow. For example, if you apply for a £50,000 car loan but have credit card debt of £10,000 and a home mortgage of £300,000, your application may be flagged as high risk. It doesn’t necessarily mean you’re ineligible for a car loan, but it is something to consider when investigating why you’ve been denied a car loan with good credit.

What to do if you’ve been refused car finance

At the end of the day, no application is guaranteed, regardless of how high your credit score is. Lenders will always scrutinise applications and consider a variety of criteria. It’s important to understand exactly what goes into the decision making process to maximise your chances of success.

Review your application

If you’ve been refused car finance, the simplest thing you can do is review your car finance application. Look for any inaccuracies such as your address, salary and other financial information. Many lenders may point these out to you to help you get car finance.

Apply for a cheaper deal

Another simple trick is to apply for a cheaper deal that suits your personal circumstances. You could find a cheaper car, which would mean lower monthly payments.

You can also check the different types of car finance available.

Pay off existing debt

If you have lots of existing credit agreements, you might want to consider paying some off before applying for car finance – if you have the means to do so, of course. This could reduce the risk for lenders, as you’ll be in a better position with fewer outgoings and only one lender (or a select few) to repay.

Denied a car loan with good credit? We can help!

Being denied a car loan with good credit is frustrating. The good news is, we’re here to help. At My Car Credit, we have access to one of the largest and most diverse lending panels in the UK. This helps us to match your application with a wide range of trusted lenders, instead of the usual high street banks.

My Car Credit is fronted by a dedicated team of experts who can help you understand more about car finance eligibility and get to the bottom of why you’ve been denied a car loan with good credit. It’s this commitment to success that helps our customers get behind the wheels of their dream cars faster.

To discover how My Car Credit can help you obtain the right car finance, check out our online calculator to crunch the numbers on financing your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

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 financing car loan credit score employment finance Jan24

Can I Get a Car Loan Instantly Online?

When it comes to purchasing a vehicle, there are a number of ways to do so. Two of the most popular means are car loans and car finance. The type of finance agreement that’s right for you will depend on a number of things, including your credit rating and the speed with which you want the agreement to be approved.

Can I get a car loan online?

A car loan is a kind of personal loan that’s strictly for the purchase of a vehicle. Car loans are secured, and the amount that you borrow as well as the interest rate is typically dictated by the price of the car.

Finding a car loan can be done online, and it’ll typically only take minutes to fill out an application form. However, securing a car loan might not be quite so speedy.

How long does it take to secure a car loan?

The initial submission of a car loan application form can take mere minutes, but locking down that loan can take longer. It’s also worth noting that banks and credit unions will typically take longer to process applications than online lenders. The turnaround time will vary between providers, as will the length of time that you might wait for your loan to come in.

There a number of other factors that will impact how long it can take to secure a car loan…

Your credit score

Applicants for a car loan usually have to have a strong credit rating when applying – and if you’re opting for pre-approval of a car loan, having a good credit score is essential, as a hard credit check will be performed.

That’s why it’s worth doing your homework in advance to ascertain whether or not the lender to which you’re applying will accept less than ideal credit ratings, as well as determining whether your report has any errors or lists incorrect information. If you’ve got a poor credit rating, car finance may be a more accommodating option for you over a car loan.

Lack of documentation

When applying for either a car loan or car finance, you’re going to have to provide some personal information, which can also include documentation. Lacking these – or not submitting them in time – will delay your application, so it’s worth having these to hand.

Not doing your homework

As already detailed, you want to look over your credit rating in advance of your application to ensure there are no errors, but it’s also worth researching the car loan provider. Many institutions, for example, may have minimum income requirements for applicants, or only provide loans for specific vehicles. If you apply without doing your homework on the car loan lender, you could waste your own and their time.

Car loan or car finance?

If you have questions about whether a car loan or car finance is right for you, My Car Credit are here to help. You can contact us on enquiries@mycarcredit.co.uk today for help and advice.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Electric Car: Lease vs Buy – Which is Best?

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

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 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 rating credit score online car finance

Is car finance easier to get than a loan?

Car finance, personal loans – when it comes to purchasing a car, there are a number of ways that you can finance it. But is car finance easier to get than a loan, and how do these agreements differ? In this article, we’ll provide answers to all these questions, helping you to get in the driver’s seat (literally and metaphorically)!

Car finance vs. a loan – what’s the difference?

First up, you need to understand the difference between a loan and car finance. A personal loan involves borrowing money from a bank or other financial institution. You’ll typically repay this over a pre-determined series of monthly instalments (plus interest). Meanwhile, a car loan is a type of personal loan, but is for the specific use of purchasing a vehicle (as the name suggests).

Car finance is when either a financial institution or lender gives you a loan to finance your car. You’ll then pay this loan off with a series of monthly instalments (plus interest).

There are various different kinds of car finance. The right kind of car finance will vary between drivers, all of whom have different needs and preferences – for example, whether or not you want to be the vehicle’s owner, whether you can manage mileage and other caps, whether the agreement is secured, and the length of finance term and interest rate that you may face.

There’s a real difference between these types of car finance, but the two most popular are HP (hire purchase) and PCP (personal contract purchase).

Car finance vs. a loan – which is easier to secure?

A personal loan

There are advantages to funding a car with a car or personal loan. If you choose to do so, you’ll be seen as a cash buyer by a dealer, meaning you’re unlikely to face a deposit or any balloon payments. Unlike certain car finance agreements, personal loans are unsecured, meaning that you don’t have to put up any assets in order to secure them. With a personal loan, you’ll also be the legal owner of the vehicle, meaning that you can sell it whenever suits you.

When it comes to personal loans, it may be tempting to opt for longer repayment schedules, but be aware that this does mean you’re going to be paying higher interest costs overall as a result. It’s important to be reasonable in establishing your loan period, keeping monthly payments affordable whilst sticking to the shortest loan term you can get.

Whilst you can secure personal loans from a variety of banks and institutions, the sheer availability of loans might make shopping around to find the best one for you feel overwhelming. Typically, online car finance providers like My Car Credit will be able to do that work for you, providing a no-obligation quote that takes account of your needs and circumstances in mere minutes.

Be aware that personal (or car) loans will be credit score-contingent. Applicants with higher credit scores are going to be favoured more, and there’ll be less chance of securing a loan if your credit score is poor. For those of you who sit in this category and are looking for ways to finance a car, it’s likely to be easier to secure car finance than a loan.

Car finance

So, is car finance easier to get than a loan? Depending on your credit score, it may be easier to secure car finance than a personal loan. Many car finance providers like My Car Credit can help you to find car finance even with a poor credit rating, and initial credit checks tend to be soft searches – unlike with a personal loan.

The process of finding and securing car finance is also significantly quicker than when trying to locate a personal loan. Online application processes make your search quick and easy. They’ll also provide you with an almost immediate sense of the kind of finance term you may be eligible for.

Bear in mind, too, that because car finance is often a secured loan – meaning that the car is used as collateral – it can be easier to get than a personal loan. However, usually you will have to pay a deposit (typically around 10%), and if you fail to make your repayments in a timely manner, you’ll lose the car.

Start your car finance journey today

If you’re looking for an easy, flexible and affordable way to purchase a vehicle, get in contact with My Car Credit today on enquiries@mycarcredit.co.uk. We can discuss your car finance needs and help you find an agreement that suits you.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

HP, Conditional, PCP: The Lowdown on Car Finance Options

8 Advantages and Disadvantages of a Balloon Payment

How Many Years in a Car Loan Term?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

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

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

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

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

Require more help?

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

or call 01246 458 810

car finance car finance options car loan credit rating credit score Jan24 online car finance

What Does ‘Finance’ Mean When Buying a Car?

When it comes to car finance, there’s a lot of jargon and acronyms, and it’s easy to find yourself questioning what each finance agreement really means.

This post aims to help you get to grips with what different types of finance actually mean when buying a car, and how they work. Once you’ve understood the different kinds of agreements available, you’ll be on your way to securing a car loan quote that will work for your circumstances.

So, what does ‘finance’ mean when buying a car? Read on to learn more…

What does ‘finance’ mean when buying a car?

In essence, car finance makes the purchase of a car more affordable. It’s a credit agreement between you and the lender, allowing you to make full use of the vehicle whilst paying it off in cost-effective monthly instalments according to a pre-agreed schedule. The amount you pay off will also include additional interest on top.

What are the different kinds of car finance?

The right car finance for you will depend on the kind of agreement and terms that you’re looking for, as well as your own driving preferences and needs.

Car loan

A car loan is a type of personal loan but is specifically designed for use on vehicles.

With a car loan, you borrow the money from either a bank or building society. Once you’ve bought the car, you are its outright owner. You’ll repay the car loan over time via instalments, with added interest. Typically, a car loan is more likely to be granted to those with a good credit score – there are other kinds of car finance available for those with poor credit ratings.

Personal Contract Purchase (PCP)

Do you like mixing up the vehicles you drive? Are you happy sticking to mileage caps or paying excess fees for any vehicular wear and tear? Would you like flexibility in choosing whether or not to own the vehicle at the termination of the agreement? Then PCP is potentially the car finance for you. In fact, PCP is the most popular kind of car finance because of its low monthly repayments and flexibility.

With PCP car finance agreements, you’ll pay a deposit and monthly instalments (plus interest). The larger your deposit is, the lower these payments will be. These payments are typically lower than other kinds of car finance as you’re only paying for the car’s depreciation in value during the time that you’re using it.

You can also choose whether or not you want to own the car once you’ve fully paid off the finance. If you do, you’ll pay a final balloon payment to make up the remaining value of the car. If not, you can hand the car back to the dealer with nothing more to pay. Be aware that you won’t own the car unless you opt to do so at the agreement’s termination.

Hire Purchase (HP)

Hire purchase car finance is similar to PCP, but a little more straightforward. You’ll typically make a deposit of around 10% with HP finance, then make fixed monthly payments according to a pre-determined schedule. Repayment terms can be relatively flexible, and there are often competitive interest rates with HP finance.

Like with PCP, you won’t own the vehicle until you’ve made the final repayment of your agreement, but you can opt to do so with a final balloon payment. After this, you can choose to part exchange, sell or keep the car. However, unlike PCP, you won’t usually face mileage caps, so HP finance may be preferable for you if you’re regularly making long journeys.

Personal Contract Hire (PCH)

PCH car finance is when you lease the car, which is why it’s also known as a car leasing agreement. You will never be its outright owner – you’re essentially hiring it until the end of your finance agreement. In this way, PCH differs from either HP or PCP. Though it’s technically not car finance, as you’re not borrowing money, you’ll still see this term frequently used when discussing car financing options.

With PCH, you’ll typically pay a non-returnable deposit as well as your monthly repayments. At the agreement’s end, you’ll hand the car back. If you’ve gone over the mileage cap or have made unreasonable vehicular wear and tear, you’ll pay a penalty fee.

Find the right car finance for you with My Car Credit

Shopping around for car finance can seem stressful, but it needn’t be. My Car Credit aims to make the process of securing your dream deal stress-free and streamlined. Contact our expert team today on enquiries@mycarcredit.co.uk to start your car finance journey.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

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 finance options hire purchase Jan24 pch PCP

Car Loan Early Repayment – Is It Worth It?

There are many reasons why people consider paying off their car finance early. But whether you are eligible to do so depends on your personal circumstances, as well as the details of your car finance agreement.

You should expect to pay a settlement fee if you opt for early repayment of your car loan. As such, whether or not early repayment is worth it will vary from person to person, but you do need to think hard about whether you can afford to do so.

What is an ERC?

An ERC (early repayment charge, also known as a settlement figure or resettlement fee) is a penalty charge that you’ll likely have to make if you opt for early repayment of your car loan. This charge typically amounts to two months’ worth of interest, depending on your lender. Whether or not your car finance lender will charge you an ERC, depends on their policies and the type of car finance agreement you have.

Before you decide on an early repayment, it’s essential to know whether you may be liable to pay an ERC, so check with your finance provider first. Once you’ve asked them for this figure, you usually have around 28 days to decide if you want to proceed with the early repayment of your car loan.

How does car loan early repayment impact your credit score?

You may think that making an early repayment of your car loan would improve your credit score, but this isn’t necessarily the case.

If you pay off your car loan early, the account will show as closed within your credit report. It’s only open accounts that have an impact on your credit score, and other lenders sometimes like to see these accounts, so they can gauge how timely you are with repaying your debt. However, once your car finance account is closed, any benefit on your overall finance management won’t be evident on your credit report.

If you need your credit report to work in your favour – for example, if you’re applying for a mortgage or re-mortgaging – then you may be better off keeping your car finance open on your credit report.

Is it worth early repayment of a car loan?

Whether or not the early repayment of your car finance is worth it depends entirely on your situation and the terms of your agreement. You need to ask yourself whether you can truly afford the early repayment or settlement fees, and whether it might be beneficial to stay in the finance deal for the sake of your credit score.

Other factors to consider include whether you’re in negative equity. Essentially, if the settlement figure that you’ll have to make for early termination is higher than the value of the car, it’s probably worth waiting out your car finance term in full until you’re in positive equity.

Similarly, if you’re already close to the end of your finance term, it’s likely cheaper to stick to your current finance deal and finish all of your repayments, rather than face the settlement (ERC) fee.

Returning the vehicle

Another factor to consider if you’re on either HP or PCP finance is whether you want to return the car at the end of the finance term. Under the Consumer Credit Act of 1974, you can opt for ‘voluntary termination’ of the agreement, provided you’ve already paid half the cost of the car or will make up the difference between what you’ve paid and that number. However, if you do so, you won’t be able to return the car to the finance provider – you will be its legal owner.

This may be beneficial if the car’s value is higher than that of your remaining payments, as, once you’ve paid any settlement fee, you can then sell the car on and make a profit. But you may still be charged by your lender if you opt for voluntary termination. This amount is capped by law, but it’s still worth considering. Companies may also react badly to frequent voluntary terminations on your credit file, too.

Discuss your car finance needs today

If you want to get a car finance quote, discuss early repayment of your car loan, or have any further questions about the process, you can email My Car Credit on enquiries@mycarcredit.co.uk today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

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 score early repayment Jan24

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

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

How to Strengthen Your Eligibility for Car Finance

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 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

Does Getting a Car Loan Hurt Your Credit?

Buying a car is likely one of the largest purchases you’ll ever have to make. This is why so many people are turning to car finance in order to make the process more manageable and affordable. However, occasionally we come across doubts about whether getting a car loan might hurt your credit.

This article will detail the different ways that getting car finance on your new vehicle might impact your credit – both positively and negatively.

What is a credit score?

Whether you know it or not, you will have a credit score. A credit score is used by lenders to understand your financial history. Furthermore, it allows them to make a judgement on whether you’re a good candidate for future loans. As such, lenders will perform credit checks on you to gauge this. These are known as either hard or soft, depending on whether they impact your score.

Credit reference agencies

Almost all forms of personal finance will impact your credit score. This is typically provided by different companies known as credit referencing agencies. Your number will usually be between 300 and 850. Generally, the higher it is, the better your credit rating – but there are variations between the companies who provide your score rating. In turn, this will impact where you sit on the spectrum of credit. A score of 500 with TransUnion would be below average for them, for example, but good for the provider Equifax.

Payment history and your credit score

Your payment history has a huge impact on your credit score, as does your history of applications. This is why if you make payments on time, this will positively affect your score. Conversely, there are things that might indicate to lenders that you’re a riskier candidate for a loan. For example, if your credit report shows missed payments or defaults, if you’re paying off multiple loans, or if you are near your credit limit. Your credit score might not be the singular factor in whether you’re approved for a loan. However, it will have an impact on your chances.

How does a car loan impact your credit score?

As with most things, getting car finance has advantages and disadvantages for your credit score. It will entirely depend on how you manage your repayments. It’s important to realise that when you first get your car finance loan, it will likely make a slight dent in your credit score. This is because it’s a hard enquiry into your credit history. However, if you are regular and on time with your repayments, this will soon bounce back.

Advantages of car finance on your credit score:

If you make your repayments on time every time, this might have a positive impact on your overall credit score. In essence, it shows lenders that you’re a safe bet for future loans. Be aware, however, that this can take time to show up on your credit score.
It diversifies your credit mix. Your credit mix refers to the types of credit that you have on your roster, which is usually divided between revolving credit (like credit cards) or instalment credit (like car loans). Lenders like a mix of both, so adding car finance onto your profile can make you more appealing for future loan applications. This in turn boosts your credit score.

Disadvantages of car finance on your credit score:

If you are late on your repayments or miss one or more payments, your car loan is considered delinquent. You’ll typically be given a grace period to make the payment back. However, if your lender is required to take further action against you then your credit score will be negatively impacted. For example, if a full billing cycle goes by without you making payment. Consequentially, you might find it harder in the future to find good interest rates or a loan.
If you default on the loan, your credit score will also be impacted. Should you continue to not make payments, the car finance lender may involve debt collectors, who could repossess your vehicle. Each of these elements – late payments, default, transference of the account to debt collectors, or repossession – leave a separate mark on your credit report. Furthermore, they’ll stay there for up to seven years, and they have a significant negative effect on your credit score.

Car finance and credit scores: what to know

Before you begin your hunt for car finance, it’s also important to understand the difference between different kinds of credit checks. This is because finance companies may conduct either a hard search or a soft search on your credit score.

Hard searches:

Some finance companies will conduct a hard search or enquiry on your credit report. This is a process that begins when you first apply for credit, and it requires your consent. However, it won’t happen if you’re only looking for pre-qualification to decide whether to apply.

A hard enquiry will take points off your credit score. This is temporary – usually staying on your report for two years – but will be visible on your credit report. It’s therefore best to limit the number of hard searches taking place on your score. You can do this by checking in advance of application whether you’re likely to be approved.

Soft searches:

Soft searches, by contrast, won’t impact your credit score. As such, they can take place without your knowledge. This kind of check is designed to give a ‘footprint-free’ check on your credit score, without lenders seeing any evidence of it. It aims to give you an idea of whether to enter into the terms of a car loan, without negatively affecting your score in the first instance.

Speak to My Car Credit today to find out more

If you want to find out more about whether or not getting a car loan will hurt your credit, speak to My Car Credit today. Our friendly team can help you get a car finance quote with a soft search that won’t impact your score. From there, you’ll be able to discuss your viability for a loan with one of our advisors. Get in touch today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Tips for Securing Affordable Used Car Finance Monthly Payments

What Criteria Poor Credit Car Finance Lenders Look for in an Application

How Long Does It Take to Get Your Credit Score Up?

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 loan credit profile credit reference agencies Jan24

Can I Get a Car Loan with a Poor Credit Score?

Car driving bought with a low credit score loan

It’s common for lenders to carry out a credit check on anyone who applies for a car loan. This is usually a ‘soft search’ initially. Credit checks can lead to those with poor credit scores shying away from applying due to the fear of rejection. However, you’ll be surprised how easy it is to successfully obtain a loan by making a few minimal changes.

In this short guide, we’ll explain everything you need to know when applying for a car loan with poor credit. In addition, we’ll cover how to get the best deal by ensuring your credit score is up to scratch.

What is a car loan?

Finding the right car within your price range can be a challenge. But, with a car loan, you can spread the payments out over a course of several months or years. This is a great way of significantly increasing the options available to you.

Two popular forms of car loan are a personal loan and Hire Purchase (HP). A personal loan will see someone borrow money from a lender, bank or building society. This allows them to have instant ownership of a car. In contrast, HP will have the individual pay an initial deposit (not always required) with fixed monthly payments for the next three to five years. They effectively hire the vehicle over the period, with the option to purchase at the end.

At the end of the term, they will be offered three choices; to either return the car to the supplier, keep it, or trade it in for a replacement. However, you must be careful not to miss the repayments before the end of the term. In these cases, the finance company may decide to repossess the vehicle to settle the debt.

How can you improve your credit score?

A lender will perform a credit check to ensure that the person applying can afford the monthly payments. People who obtain an excellent credit score will have demonstrated a firm grasp of their finances. In theory, this makes for a reliable choice for lenders.

Those described as having a ‘thin’ credit history will have a history of missing payments. Alternatively, there may be little concrete evidence of financial security, such as never owning a credit card or bank account. A higher credit score will open more doors. This could include a much more comprehensive range of car loan options. These are often accompanied by much more favourable interest rates.

Here are some simple but effective ways of raising your credit score.

1. Identify the problems in your credit report

Before you apply for a car loan, it will be wise to get a free copy of your credit report. This will give you an idea of any pitfalls that may scupper your loan request. There may be some glaring mistakes you are making in the way you handle your money, damaging the profile. It is also worth ensuring it is up to date and doesn’t contain any errors or inaccuracies which could unfairly affect your score.

2. Apply for a credit card and use it sensibly

Credit cards have a strange reputation of being a poor way to save money. But the truth is that as long as you’re making repayments on time, they will put you in good stead to improve your credit score. Proof that you can budget and regularly meet repayment deadlines will help you secure a more competitive car loan deal.

3. Stay away from bad credit

If you’ve ever been financially linked with someone you know has bad credit, such as a joint account or shared mortgage, it may lower your credit score. If this is the case, it will be a good idea to issue a notice of disassociation. This informs lenders that you are no longer financially linked and should be judged on your own merit.

4. Settle any loans

Now is the time to settle those loans and reduce your debt as much as possible. This is easier said than done, but to get behind the wheel of the car you desire you may need to work at it.

What are my other options for obtaining a loan?

Start by crunching the numbers on a car loan calculator. You may consider making slight changes to the car loan variables to see how it can help. No matter how low your credit score, some changes can ultimately work in your favour to help you get a car with poor credit history.

1. Pay a larger deposit

Simply put, a larger up-front deposit will mean your monthly payments will be reduced. This in turn minimises the risk for the lender in ensuring they are met. It can be frustrating as you’ll be forking out a potentially huge chunk of money. That said, it is often a sure-fire way to improve your chance of getting the deal.

2. Pay a higher interest rate

Someone with a low credit score will often need to accept a higher interest rate than the advertised representative rate. Again, it may seem frustrating on the face of it. However, don’t despair as it tends to mean only a slightly higher monthly payment.

3. Choose a lower annual mileage limit

Opting for a lower annual mileage limit can result in much lower costs month to month. This is because the car will be worth much more to the dealer at the end of the loan. This is usually related to fewer miles on the clock and less wear and tear.

However, you will want to keep the figure realistic. Going over your allowance will end up costing you dearly. You will find that there are harsh penalties that charge you for every extra mile taken.

4. Choose a used car

Opting for a loan on a used car will ultimately see you borrowing less money from a provider. This improves the possibility of obtaining a loan, even with a poor credit score. There is much less risk for the dealer as the car will already have depreciated in value. However, this doesn’t deflect from the fact that used cars are mostly reliable and of good quality.

If you worry about being able to afford to buy a car, this may be the best and most sensible option.

Need help getting a car loan with a poor credit score?

Take the headache out of getting a car loan with a straightforward and simple chat with our friendly specialists. Find out more about how we can find the right deal for you no matter how your credit score may look.

You’re not in this on your own, and we’ll support you every step on the way to get you on the road with the car of your dreams. Give us a call on 01246 458 810 or email enquiries@mycarcredit.co.uk to find out more

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

HP, Conditional, PCP: The Lowdown on Car Finance Options

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

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 loan credit score Jan24 poor credit

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

HP, Conditional, PCP: The Lowdown on Car Finance Options

How Does Auto Finance Work?

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 cash credit card hire purchase Jan24 PCP

Flexible and affordable, auto finance is one of the most popular ways to purchase a car in the UK. A good understanding of the average car loan interest rate is one of the best ways to make smart and informed decisions when choosing a lender.

Britain’s relationship with car loans

What is the average car loan interest rate in the UK?

Bank of England interest rate

Cash interest rate

Annual percentage rate (APR)

What is a good APR rate for a car?

Fixed vs variable interest rates: What’s the difference?

Is a low APR always the best deal?

Get a great car loan deal with My Car Credit

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A good credit score can feel like a gold star on your financial history report. But unfortunately, a good credit score doesn’t guarantee approval when it comes to car loan applications. If you’ve been denied a car loan with good credit, this article is for you.

What is a credit score?

Good vs poor credit history with Equifax, Experian and TransUnion

What doesn’t affect a credit score?

Reasons why you may have been denied a car loan with good credit

Financial links

Employment status and salary

Affordability

Inconsistency in applications

Existing debt

What to do if you’ve been refused car finance

Review your application

Apply for a cheaper deal

Pay off existing debt

Denied a car loan with good credit? We can help!

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Car loan

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Find the right car finance for you with My Car Credit

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