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What is Vehicle Finance?

Vehicle finance is a broad term for a series of options that will allow you to borrow the money you need to buy a new or pre-owned car – or lease it for a period before having the opportunity to buy it outright.


Worried about your Vehicle Finance Repayments?

If you are worried about how you are going to repay your Vehicle Finance, we’re here to help you! There are many people who will find themselves in a financial struggle after taking up the option of a Vehicle Finance. Here at Business Helpline,  We can discuss all of your options and help you plan for a better future.
Call our team today on 0800 088 2142.

Who can obtain car finance?

Car finance isn’t necessarily available for everybody. People will be judged on factors such as age, personal circumstances, financial circumstances, employment status, and credit rating.

Do I need a deposit for car finance?

You could be asked to put down a deposit for car finance because it will knock down your monthly payments thereafter. You will be able to specify whether or not you would be happy to pay a deposit, though, so it isn’t necessarily a prerequisite.

What is APR?

APR stands for Annual Percentage Rate. This is the interest rate that is applied to a loan; it is basically the yearly borrowing cost on top of the sum that is being applied for.

The longer you take out the car finance, the more you will have to repay in terms of interest.

What are four types of dealer finance that you could be placed into?

Almost any dealer, car broker or car supermarket will offer you a finance deal when you look to purchase a vehicle.

There are four types of dealer finance that you could be placed into:

Hire Purchase (HP)

This method secures the finance against the vehicle itself. You will not own the car until you have made the final payment. You will not be able to sell it without the permission of the lender but you can give the vehicle back.

You will ordinarily pay a small deposit (around 10%) before making repayments in installments, with any interest that is picked up throughout the loan period. After this period, you will own the car outright. It is important to note that the car can be repossessed if you miss a payment.

Personal Contract Purchase (PCP)

This usually involves paying a deposit and some low monthly installments over a fixed period of time. You can pay a lump sum to buy the car outright, give the vehicle back, or sell it privately to pay off the money that you still owe. This is a good option for people who want to change their car often and it is based around a minimum guaranteed future value.

It is important to keep to the agreed mileage limits and to make sure that the car stays in a good condition. You may receive penalties if you do not. You are only hiring the car and you will not own it until the full payment has been made. If you want to keep the car, this method might be less cost-efficient than HP.

Personal Leasing

Personal Leasing is like PCP with its low monthly payments, however, you do not have the option to buy the car. Nonetheless, it is convenient for people and it is easy to change the car. Mileage limits, type of contract, and car type all accumulate to determine the leasing cost. It is expected that you pay up to three months’ rental in advance.

Although, while servicing could be included, you will probably need a big deposit upfront. Mileage limits may help to dictate the overall cost.


“0%” deals are usually offered in the hope of offloading an old or slow-selling type of vehicle. This can be an affordable route to go down, with no interest charged on monthly payments. Keep in mind that you’ll probably have to put down a large deposit (35% or higher) and you won’t be able to negotiate any more discounts. A missed payment will see you moved to a higher scheme with a bigger interest rate.

There are obviously independent financial measures that you can take to purchase a car, such as a bank loan, but you should talk to us before making any decisions like this.

Get in touch

With soaring fuel prices a big part of the cost of living crisis, people might now be thinking twice before looking to purchase another car or motor vehicle.

Please talk to our compassionate experts before making any rash decisions. They are here to help you during every step of the way.

If you are unsure whether this pathway will be right for you, don’t hesitate in contacting us.

Call one of our compassionate experts at 0800 088 2142.

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Vehicle Finance FAQs

What is a reputable dealer?

A reputable dealer is somebody who you can trust. They have a strong customer base and they will act professionally. You get that reassurance when comparing vehicle finance deals through us, as we are linked to lots of reputable lenders.

How quickly can I get a loan?

All lenders are different. Some lenders can get you money within two days, however, others transfer the money within three to five days.

Is it cheaper to buy a car outright or to use car finance?

In most cases, buying the car outright will be cheaper. You should always add on your APR when calculating the cost of a car finance deal.

What is a guarantor loan?

A guarantor loan is comparable to an unsecured personal loan. One difference is that the borrower is guaranteed by the guarantor.

In essence, the guarantor will cover the borrower’s back if they are unable to pay back the money that they borrowed.

Who can be a guarantor?

Anyone who isn’t financially linked to you (a partner) can be a guarantor. They will need to be between the ages of 18 and 75 and they will need to have a good credit history. A guarantor will need to provide bank statements, proof of ID, bank details and proof of ID.

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