Buying a car is likely to be one of the most significant purchases you make. Even for a second-hand model, a car represents a sizeable outlay. For this reason, many people choose to seek help in the shape of car financing. This can not only allow you to afford a better vehicle, but give you greater control of your finances, as well.

To meet this growing demand, there are now a number of different used car finance deals available. These include hire purchase, conditional sale, personal contract purchase, personal contract hire, personal loan and guarantor loan. The best way to finance a used car will vary from person to person, depending on their unique circumstances.

Used car finance deals

Our quick guide should give you a better idea of the options available and allow you to make an informed decision about whether to buy or finance your next vehicle purchase. Read on for a quick rundown of the types of used car finance on the market today.

Hire purchase (HP)

As one of the simplest types of car finance available, HP is also one of the most popular. Under this arrangement, you’ll pay an initial deposit, then hire the vehicle until you have paid for it in full. In addition, you’ll spread the remaining cost over a pre-agreed number of monthly instalments. There is no large payment at the end (as there is with PCP) but you may have some admin and transfer of rights fees to cover. Once you’ve paid the agreement off in full, the vehicle then becomes yours.

Conditional sale

A conditional sale arrangement is similar to HP. However, the monthly payments are usually higher but there are no fees to pay at the end. The ownership of the car will automatically transfer to you once the final loan amount has been paid.

Personal contract purchase (PCP)

PCP finance for used cars works on the same principles as HP. However, the difference is that a significant chunk of the total price of the car is held back for an optional final payment. That means that the monthly repayments can be a lot lower, making it easier to afford a newer or higher value vehicle.

At the end of a PCP finance for used cars deal, you will have a choice of three options. You can pay the final sum and own the car outright. Alternative, you can use any equity in the contract as a deposit for your next vehicle. Of course, you can simply walk away from the deal altogether. This can be a helpful option for those who aren’t sure if they would like to keep the car after the contract has run its course.

Personal contract hire (PCH)

PCH is essential a long-term leasing arrangement, whereby you pay an initial deposit and a series of monthly instalments thereafter. You must also adhere to a maximum annual mileage allowance. Bear in mind, you may face a hefty fee if you leave the contract before it has reached the pre-agreed expiry date. 

Personal loan

A personal loan is similar to one you might obtain from a bank and will depend largely upon your credit score. The loan is not secured against the car itself. This means you can sell the car at any time as long as you continue to keep up with the repayments. You’ll also own the car outright from the get-go.

Guarantor loan

Aimed at those with a poor credit score, guarantor loans involve a third party who is liable for covering repayments that you yourself may not be able to. This is ideal for those who struggle to be approved for finance in general. What’s more, when adhered to responsibly, a guarantor loan can help to improve your credit rating. However, it is a big responsibility for both parties as both become liable should you not keep up with repayments.

Take stock of your options

The best way to finance a used car for you will depend greatly on your own personal situation. You’ll need to consider the type of car you wish to buy, whether you want to own it outright after the deal is concluded and what your credit history looks like. With that in mind, it’s a good idea to sit down and assess the options available to you. You’ll discover a vast resource on the internet to understand which type of finance is best for you.

In this respect, a car finance calculator can be a very helpful tool too. This will help you to understand how much you’ll be liable to pay throughout the course of a car financing contract. On the other hand, if you’d prefer to speak to a qualified professional and obtain advice about the best course of action for your situation, our team are always here to help.

Simply give us a call on 01246 458 810 or drop us an email at and we’ll get back to you at our earliest convenience. Your next dream car could be just a phone call away!

Rates from 9.9% APR. Representative APR 12.4%

Evolution Funding Ltd T/A My Car Credit

My Credit Rating


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


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


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


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


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

X monthly repayments of

Typical rate

Loan amount

Total payable




*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 12.4%, annual interest rate (fixed) 12.36%, 47 monthly payments of £196.44 followed by 1 payment of £206.44 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,939.12, total amount payable is £9,439.12.

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

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

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

Require more help?

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