Car Finance

  • PCP, Contract Hire & HP
  • New & used cars
  • Dealer & private sales
  • One-to-one service
  • All credit ratings
  • 94% overall rating
Car Finance Loans

Car Finance & Car Loans

Around 90% of people in the UK buy cars on finance with the majority of these using a Personal Contract Purchase (PCP) plan.

While there are many ways to finance the purchase of your next vehicle (use our Find Loan tool) specialist “Car Finance” is designed for the specific purpose of buying a motor vehicle. You could get this finance from the car dealer, but you have more control if you use an independent broker.

We’ve partnered with Zuto, the UK’s leading car finance broker.

 

 

Aged 17 to 24? Want a new car and free insurance? Find out about Marmalade’s cars for young drivers

Our Partner Zuto

  • PCP, HP, Contract Hire & Car Loans
  • Credit problems? Special plans available
  • Get a dedicated adviser/car buying expert
  • Conduct a car “stock search” to find your car, if you wish
  • Get peace of mind – a full vehicle history check & valuation.
  • No Fees!
  • Questions about Car Finance? Read our FAQs

About Zuto

Why is Car Finance so popular?

To buy your next vehicle you could of course use a personal loan. But there are several reasons why car finance is proving to be more popular:

  • monthly payments can prove to be lower (though you will have to pay an upfront deposit) than those for a personal loan
  • owning the car is not seen as relevant – the only thing that matters is its use
  • car finance deals can sometimes include servicing costs
  • you can afford a newer car or a better brand than you otherwise could
  • it wraps the car purchase and finance arrangements into one straightforward deal
  • there may be more options if you have had financial issues that have damaged your credit rating
Zuto banner advert

How to Choose the Right Car Finance Deal

Our car finance partner Zuto is one of the UK’s leading car finance brokers. We’ve partnered with them because they offer excellent service (a 94% customer rating) and share our values. Their service extends beyond simply finding your finance. They have an approved network of dealers you can use if you wish, and regardless of where you find your next vehicle they will check its history and value for your peace of mind. And they do not charge any fee! If you’re aged 17 to 24 then Marmalade’s Cars for Young Drivers may suit you even better.

Decide what you need

1: Decide what you need

Consider both the amount you need to borrow and the amount you can afford to repay each month.
Learn about car finance

Buy with confidence

3: Buy with confidence

Zuto can help you find a car to meet your needs if you haven't already got one in mind. They can provide a history check and valuation for peace of mind.
Learn about Zuto
Aged 17-24? Learn about Marmalade

Get on the road

4: Get on the road

Once the lender has approved your application Zuto will pay the dealer for you and all you need to do is collect the car!

PCP vs HP: What are the key differences?

The hire purchase route suits people who definitely want to eventually own the vehicle. The PCP route, which is the most popular one, suits those who are uncertain if eventual ownership is their goal. Under both these options the finance company owns the car while monthly payments are being made. In the case of PCP you can opt to make a final balloon payment so that you do own the car at the end. These plans can suit anyone regardless of credit history.

Hire Purchase (HP)

  • you’re hiring the car while you make payments
  • you pay a deposit and make monthly payments
  • after you make the final payment you own the vehicle

More

 

Personal Contract Purchase (PCP)

  • you lease the car for a fixed period (typically 2-3 years) and make regular payments. The size of your deposit will affect the monthly repayments you make.
  • while leasing the car you don’t own the vehicle
  • at the end of your lease contract you can:
    • hand the vehicle back and no more costs are involved
    • part exchange the car for a new PCP deal
    • purchase the vehicle outright with one final “balloon payment” which you know in advance.
  • Going over a set mileage will incur extra costs
  • Some contracts include vehicle maintenance

More

 

Note: there is also car leasing which is a simple long term rental product (also known as personal contract hire). It is like PCP but without the option to buy the car at the end of the agreement.

What are the comparative costs?

You will need to get proper quotes from our partner(s) to check this, but in general PCP payments are usually lower than HP – simply because with HP you are working towards buying the car outright which is not the case with PCP. With HP you may also need to make a larger initial deposit than you will for PCP.

Here’s a real-life example of monthly and total payments for PCP, HP and Contract Hire.

Bad Credit Car Finance

You may be one of the 10 million UK citizens who has had credit problems. These could include being in arrears, defaulting on debt commitments, suffering a County Court Judgement (CCJ), a Debt Relief Order DRO), having an IVA or being made bankrupt. Yet many people who have mild to average debt problems are still able to get car finance if they can show they can afford the repayments. You may be able to as well.

Zuto has a broad panel of lenders designed so that they stand a reasonable chance of finding car finance for a person with a poor credit history. That is not to say, of course, that you should embark on getting credit if you know that it will only make your financial position worse. If you can get credit it will be at relatively high interest rates because of your credit history.

 

Quick answers to common questions about car finance in bad credit situations:

How does bad credit car finance work? In the same way as any other car finance product. It may be though that you have to pay a higher rate of interest and/or provide a guarantor.

Can people with bad credit get car finance? Yes, assuming that your credit problem is not excessive (e.g. being bankrupt, on an IVA or debt relief order) and that you can show that repayments are affordable.

What are bad credit car loans? Car loans are really personal loans that are used to buy a car outright from the start. So a bad credit version is one where you may have to pay a higher rate of interest or provide a guarantor.

Can I get bad credit finance without paying a deposit? All forms of car finance are built around an initial deposit. It is very doubtful you will be able to find one with “no money down”. A better option for you may be a bad credit car loan.

Get Quotes

 

Car Finance Loans Guide

If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.

Got a Question about Car Finance?

Answers to Common Questions

Please note: this information is for guidance only. You should clarify the terms of the loan with the lender before entering into an agreement.

How does car finance work?

The term car finance covers a multitude of products that allow people to pay for the replacement of their vehicle. All of them require monthly payments. Some require an initial deposit. Some allow the borrower to own the vehicle either from the start or at the end. Other products simply allow the borrower to drive the car while in the contract but hand it back at the end.

Which car finance is best?

The answer depends on what your main objective is – simply to use a car but not own it, or to use it and own it (if not initially then at least by the end of the contract). Also, do you want to minimise hassle and if so are you prepared to pay a premium for this?

As we explain above, and in more detail here, there are some important differences between the products that you need to be aware of before going down a particular route. You’ll also be surprised, perhaps, just how different the monthly costs of each product are. Your budget is also likely to determine which options are most viable for you.

What's the difference between CarFinance 247 and Zuto?

Both CarFinance 247 and Zuto are large online car finance brokers. Both have excellent reputations. Both work with a range of lenders to provide car finance to people with credit ratings ranging from good to poor. So, how do they differ?

  • CarFinance 247 has its own lender, 247 Money, that allows it to extend its range of credit options.
  • CarFinance 247 is two to three times the size of Zuto in terms of revenue. It is also much more profitable.
  • Google Trends suggest that CarFinance 247 is searched for around 20% more than Zuto.

But size isn’t everything, and given that both brokers are likely to have different lenders on their panel it could make sense to get quotes from both before you commit to your final car finance choice.

Which is better - car finance or a personal loan?

The first key difference is that using a personal loan means you are completely separating the buying of the vehicle from the funding of it. Another name for this is a car loan. This route means you own the car from the start, can use it just as much as you wish without any financial penalty, and even sell it before you’ve paid off the loan.

Car finance is a range of products, as we’ve described above, some of which allow owning the car and others that do not. Some will also aim to restrict the excessive use of the car by charging you if you exceed mileage limits. You will also need to look after the vehicle to avoid charges when you hand it back.

But it is worth saying that some forms of car finance probably will incur lower monthly costs than if you use a personal loan. You should always explore all the options before committing to a financial solution.

What if my credit rating is less than perfect?

Our trusted partner Zuto has access to a large panel of lenders including those who have special plans for those with less than perfect credit. The price of finance in these circumstances will be higher but it is available. The options of personal contract purchase (PCP) or hire purchase (HP) are likely to mean your monthly payments will be lower than with a bad credit personal loan or guarantor loan.

Typically HP plans are more suitable than PCP plans for people with credit problems, but it is worth applying to Zuto to find out more.

Does car finance require a guarantor?

If you have a poor credit history then it is possible that you will be asked to provide a guarantor for your car finance. However, you may be able to pay a higher APR% instead to avoid this.

Where can I buy my vehicle from?

The simple answer is anywhere, but it depends on the particular lender. Different lenders have different rules. It is likely that buying from a reputable dealer will give you the most finance options. We would recommend that if you are looking to buy a car privately or from an independent dealer (rather than from a network) that you bring the details of that vehicle to Zuto to aid in the selection of the finance. They will also be able to give you peace of mind by checking the vehicle’s history and valuing it so you don’t overpay.

Can I get car finance to buy a car privately?

We would recommend that you find the vehicle first and then sort out the finance with Zuto. They can quickly tell you which lenders can help, check the vehicle’s history and provide a valuation. Better this way than getting finance in principle, then finding a car only to discover that the lender won’t lend against that specific car.

Can I change my car if I haven't got a deposit or a part-exchange?

Zuto deals with lenders who can fund the entire purchase of your next car. You don’t need to worry if you can’t provide a cash deposit or don’t have a vehicle to part-exchange as your deposit. However, it is worth pointing out that if you can provide a deposit you will benefit from lower monthly payments during the duration of the contract.

Is car finance available for young drivers?

Yes, it is and one of the best providers is Marmalade. They offer car finance to young people aged 17 to 24. If you are aged 21 or under you may need to provide a guarantor because you are unlikely to have a sufficient credit history or potentially a stable income. Find out about Marmalade’s car finance offer.

Can I exit my car finance early?

This all depends on the specific terms of the finance agreement. Even if you can there may be early redemption charges. The additional complexity is that the finance is attached to a specific vehicle and it may not be possible to simply hand this back without penalty. If an early exit from your car finance agreement is something that is very important to know about then you must ask the lender before you sign.

You may also wish to explore the use of a personal loan (car loan) if you want the flexibility of an early exit – this is likely to be much more straightforward.

What happens if I miss any payments?

As with any credit, missing repayments or being late with them will undermine your relationship with the finance company and ultimately they could take away your vehicle. Don’t forget that under both PCP and HP plans you don’t own the vehicle during the period of making regular payments.

If this risk makes you uncomfortable then you could opt for an unsecured personal loan – with one of these you do own the car/bike/van and if you do happen to struggle to make a payment on time there may be less risk of you losing it.

But bear in mind that if you already have a poor credit rating a personal loan is likely to more expensive than specialist car finance.

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Written/Reviewed by: Amanda Gillam