Car finance

You generally have to be over 18 to get car finance, and lenders will often have their own specific requirements. You can find out more by looking at their website or contacting them directly, by phone, email, or post.

Yes. Most car finance providers will carry out a credit check when you apply, to assess your credit history and ability to repay the loan. This may initially be a soft search, which won't affect your credit score, followed by a hard search if you proceed. A hard search will be visible on your credit report and could temporarily affect your score.

Car refinancing involves moving onto a new car finance deal, and using this to pay off your existing agreement, usually to benefit from lower interest rates or lower monthly payments.

To apply for a loan you’ll need your address, contact details, details about your income, expenditure and employment. You’ll also need to mention how much you want to borrow, and for how long.

This depends on the lender. Some loan providers will charge you extra fees if you start making higher repayments than have been agreed, but others may allow it. There may be an early repayment penalty charge if you want to clear the loan in full before the end of the term.

Missing repayments could have several negative effects, so speak to your lender as soon as possible if you are experiencing difficulties. They may be able to offer options to help you manage the situation.

Missed payments can harm your credit score and, if the debt remains unpaid, could eventually lead to a County Court Judgement (CCJ). Any assets secured against the loan could also be repossessed. Missing repayments may make borrowing more difficult and expensive in future.

The cheapest way to buy a car is usually to pay for it upfront with cash, as you won't pay any interest or finance charges. However, it's important to choose an option that's affordable for your circumstances, rather than focusing solely on the overall cost.

If you can't afford to pay upfront, a personal loan or car finance agreement such as PCP or HP could help spread the cost over time. Compare the interest rate (APR), length of the agreement, any additional fees and the total amount repayable, as well as whether the monthly payments fit your budget.

It can take a few minutes to a few days to get approved for car finance depending on what type of lender it is, the type of loan you’ve applied for and the type of car you’re looking to buy.

Whether it’s better to choose a hire purchase or personal contract purchase (PCP) contract will depend on a range of factors, including costs, what you want out of the deal and your personal circumstances.

PCP car finance can offer cheaper monthly payments but you won't own the car at the end of the agreement unless you can make the optional final payment – sometimes known as a balloon payment.

With hire purchase you know that once you’ve paid the final instalment the car is yours to keep.

It is also worth comparing any conditions, such as an annual mileage limit, which might influence your decision as to the best type of finance for you.

Yes, the car finance industry in the UK is regulated by the Financial Conduct Authority (FCA).

The FCA ensures lenders adhere to strict guidelines regarding transparency, affordability assessments, and fair treatment of customers.

Regulations aim to protect consumers from predatory lending practices and ensure clear terms and conditions are in place for car finance products.

Lenders must be authorised by the FCA to offer car finance, providing consumers with recourse in case of disputes.

If you’ve struggled to keep up with repayments in the past or you don’t have a credit history, it may still be possible to get car finance.

We work with specialists in car finance for bad credit, and we might be able to match you with a car loan that works for you.

Taking out car finance won’t lower your credit score unless you fail to keep up with your payments.

In fact, showing you can handle car finance responsibly over the long term can help make you more appealing to future lenders.

There’s no minimum credit score needed to get car finance. A higher score can improve your chances of approval and help you secure a lower interest rate, but even with a lower score you may still find a suitable deal.

MoneySuperMarket uses TransUnion to provide your credit score, but lenders have their own eligibility criteria and may use information from different credit reference agencies.

Yes, as with any other road vehicle, you need to be insured to drive your financed car.

Some finance companies may make it a condition of the contract that you take out fully comprehensive insurance, and may even offer insurance as part of the overall package.

Always check your finance agreement for specific insurance requirements.

Warranty and breakdown cover can provide useful peace of mind, but check what protection you already have before adding them to your car finance deal.

Compare the cost and level of cover with standalone policies, and check for exclusions. Remember, adding extras to your finance could mean paying interest on them too.

GAP (Guaranteed Asset Protection) insurance covers the difference between your car insurance payout if your vehicle is written off or stolen and its original price or outstanding finance, depending on the policy. It's not compulsory, but may be worth considering if you owe more than your car is worth. Compare prices and cover before buying.

Some car manufacturers and dealers offer the option to include a home EV charger and installation costs in your car finance agreement. However, this isn't available with every lender or deal. Check what's included, the additional cost and whether you're paying interest on the charger over the agreement term.