What is car finance and how does it work?
Car finance is a way to spread the cost of buying a car over time through monthly payments. Instead of paying the full amount upfront, you can choose from options like Personal Contract Purchase (PCP), Hire Purchase (HP), or leasing to suit your budget and needs.

​

What’s the difference between PCP and HP finance?
With PCP, you pay lower monthly payments and have the option to buy the car at the end by paying a balloon payment. HP involves higher monthly payments, but you own the car outright once all payments are complete. 

​

Can I get car finance with bad credit?
Yes, it’s possible to get car finance with bad credit, though your options may be more limited, and interest rates might be higher. Some lenders specialise in bad credit car finance to help you find a suitable deal. Contact on of the team to discuss your options

​

How much deposit do I need for car finance?
Deposits typically range from 5% to 20% of the car’s value. However, some lenders offer no-deposit finance, depending on your credit history and the agreement terms. Contact on of the team to discuss your options

​

What credit score is required for car finance?
There’s no set credit score, but a higher score improves your chances of getting better rates. Lenders will assess your credit history and affordability to determine your eligibility. Contact on of the team to discuss your options

​

Can I pay off my car finance early?
Yes, you can usually pay off your finance agreement early. However, some lenders may charge an early repayment fee, so it’s best to check the terms of your agreement. Contact on of the team to discuss your options

​

Who owns the car during a finance agreement?
With PCP and HP, the lender owns the car until you’ve made the final payment. For leasing agreements, you never own the car, as it’s essentially a long-term rental. 

​

What happens at the end of a PCP agreement?
At the end of a PCP agreement, you have three options: return the car, pay the final balloon payment to own it, or trade it in for a new finance deal.

 

What are mileage limits, and how do they affect my finance?
Mileage limits apply to PCP and leasing agreements. If you exceed the agreed limit, you’ll need to pay a charge per extra mile, so it’s important to choose a realistic limit for your usage.

​

Can I trade in my current car as part of a finance deal?
Yes, you can trade in your current car to reduce the cost of your new finance agreement. The value of your trade-in can often be used as a deposit for your new car. Contact on of the team to discuss your options

​

What happens if I miss a payment?
If you miss a payment, it’s important to contact your lender as soon as possible. Missing payments can lead to late fees, damage your credit score, or, in serious cases, result in the repossession of the car.

​

Can I return a car before the finance agreement ends?
Yes, this is called voluntary termination, and it’s possible under UK law once you’ve paid at least 50% of the total amount owed. However, additional fees may apply for excess mileage or damage to the vehicle.

​

Can I modify a car on finance?
Most lenders don’t allow modifications to cars under finance, as the vehicle isn’t legally yours until the agreement ends. Always check with your lender before making any changes.

​

What happens if I can’t afford my car finance payments?
If you’re struggling to make payments, it’s crucial to act quickly. Contact your lender immediately to explain your situation—they may offer solutions such as restructuring your agreement, temporarily reducing payments, or offering a payment holiday. Ignoring the issue could lead to missed payment penalties, damage to your credit score, or repossession of the car if the problem persists. Seeking financial advice from a professional or charity can also help you explore your options.