Skip to content
Did you know your browser is out of date?
To get the best experience when using our website we recommend that you upgrade to the latest version of one of these browsers.

Car Finance

Find the right financing deal for your car

Compare car finance deals with our partner Motiv

Compare car finance deals from across the market

Our partner Motiv works with a wide range of providers, including the big car finance brands, to help you borrow the money you need

company logo for Oodlecompany logo for CarFinance 247company logo for RACcompany logo for Zopacompany logo for Evolution Loanscompany logo for My Car Credit

How does car financing work?

Eyeing up a new car? The next step is deciding how you’re going to fund your fresh set of wheels. If you don’t have the money to buy the car outright, car finance can make the cost of a new car more affordable by spreading out the amount into monthly repayments.

There are different types of car finance that give you the option to borrow the money you need to buy a new or used car, electric, hybrid or traditional fuel car, or if you prefer you could lease it before having the choice to buy it outright.

car finance illustration

What types of car finance are there?

There are different types of car finance available to suit your financial situation, including: 

  • car icon

    Car loan

    You can take out an unsecured personal loan with MoneySuperMarket to spread the cost of buying a car over a few years. You’ll own the car outright from when you take out the loan and pay back the cost in monthly repayments to your loan provider. One of the main advantages is there are no extra fees and charges to pay on top of the loan, which you may get with hire purchase or PCP

  • document icon

    Hire purchase (HP)

    Our car finance partner Motiv can help you find the best HP deal for your needs. You’ll pay a deposit (usually 10%) and then make monthly payments to a car finance company. You’re technically paying to hire the car and you’ll only own it after you have made the final payment plus any ‘option to purchase’ fees on top. There are not usually any restrictions on your mileage during the HP contract

  • loans icon

    Personal contract purchase (PCP)

    Find a PCP deal with our partner Motiv. You'll usually put down a deposit and borrow towards some of the remaining value of the car - you won’t buy the vehicle outright. At the end of the contract you’ll have the option to make a large final payment (sometimes known as a balloon payment) to keep the car, or you can return it, or take out a new PCP on a fresh car

What is the best financing option for you? 

When deciding whether to finance your car with a personal loan or car finance, you’ll need to assess the affordability of the finance type, plus any terms and conditions that might come attached to the different types of loan or contract.

Think about how much you can afford to borrow, how long you want the car for and how you intend to use it. These factors should help you decide on the best car financing option for your needs.

If you’re after lower monthly repayments, you might prefer PCP whereas if you want to own the car once the deal is finished, a hire purchase (HP) plan may suit you best. Another option to consider might be personal contract hire - or leasing.


Personal loan

HP (Hire Purchase)

Personal Contract Purchase (PCP)

Deposit needed




You own the car straight away




You’ll own the car at the end of the deal



No (unless you pay off the remaining balance – but this is likely to be a large final payment)

Secured (against the car) 




Excess mileage charges




Monthly payments




Can I get car finance with bad credit?

If you’ve struggled to keep up with repayments in the past or you don’t have a credit history, you may be wondering if you can get car finance with bad credit.

Your credit score is an important factor that lenders look at when you want to take out a car loan. In simple terms, the better your financial history, the lower interest rates you’ll have access to.

If you do have bad credit, there are still car finance options available for you. 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.

person driving car

How much does car finance cost? 

How much financing your new wheels will cost will depend on the type of car finance you choose, how long you’ll be paying it back for (the duration) and any interest added. With PCP, if you choose to keep the car at the end of the deal, you’ll need to make a final (or balloon) payment. While PCP offers lower monthly repayments, it can be more expensive in the long run as you’re likely to pay more interest than on an HP deal.

We’ve put a table together to compare the different types of car finance (PCP, HP and taking out a car loan – also known as an unsecured personal loan or a bank loan), factoring in a deposit and the interest rate applied or APR.




Personal loan

Car price








Total borrowing price (car price - borrowing)




Representative APR*




Monthly cost (3yr term)




GMFV/final payment




*With a perfect credit score

**Assumes 45% of car price

Compare car finance with MoneySuperMarket and our partner Motiv

Find the right car finance option for you and see which rates you’ll be guaranteed to get

  • woman on computer

    Make your choice

    Decide which car finance option is right for you, from PCP or HP to taking out a personal loan

  • stopwatch icon

    It doesn't take long

    Just tell us a little about you, your finances and what you’re looking for 

  • car purchase icon

    Compare car finance

    You’ll be able to sort car finance options by overall cost and the likelihood you’ll be accepted


Car finance powered by our partner Motiv


Find a car loan with MoneySuperMarket

You generally have to be over 18 to get a car loan, 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.

To apply for a loan you’ll need your address, contact details, details about your incomings, expenditures 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.

A soft-search or soft-application is a way of finding out where you stand in terms of getting a loan without leaving a footprint on your credit report. This is important because credit searches and applications can temporarily lower your credit score in some cases. Using a soft search is a way of finding a loan you’ll be eligible for without harming your credit score and your chances of being accepted. MoneySuperMarket’s loan Eligibility Checker uses a soft search.

Missing repayments could have several negative effects so always speak to your lender as soon as possible if you are experiencing difficulties. The lender should be able to offer options to help you mitigate the problem. A missed debt payment could harm your credit score and result in a County Court Judgement against you. Any assets secured against the loan could eventually be repossessed. Try to avoid missing repayments as it is likely to make borrowing more difficult and more expensive in future.

APR, or your Annual Percentage Rate, is the interest rate at which you pay back money you’ve borrowed. It takes into account the actual interest rate you pay, plus any other fees or charges involved in the deal, to give you a more complete picture of what your loan will cost.

When you see a rate advertised as the representative APR, this means the lender is required to offer this rate to at least 51% of applicants – however it doesn’t mean you’re guaranteed to receive this interest rate yourself.

When looking to finance your new car consider what is most affordable for your circumstances, not what is necessarily the cheapest. If you can’t afford to pay for your car upfront with cash (which will usually be the cheapest way to buy a car), taking out a personal loan could be a way to spread the cost of the purchase over a number of years to make it more affordable. When deciding what is the best way to finance a car, you’ll need to consider the interest and any charges added to the finance plan you take out, and the size of your monthly repayments. 

It can take a few minutes to a few days to get approved for a car loan, 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.

When applying for car finance, you’ll usually be asked to provide a proof of identity, usually your driving licence. You’ll also need to give a proof of income and address history of the past three years.

If your car is still on finance, you can’t sell it until you’ve paid off the finance in full as you don’t legally own it yet. Once you’ve paid off your car finance in full, you’ll own your car outright so should be able to sell it if you choose to.

Car finance guides

MoneySuperMarket gives you lots of clever ways to save a lot, by doing very little.

  • Take control of your credit score by checking and improving it for free with Credit Monitor
  • Never overpay again with Energy Monitor, our energy monitoring service
  • Over 50 ways to Get Money Calm

So how do we make our money? In a nutshell, when you use us to buy a product, we get a reward from the company you’re buying from.

But you might have other questions. Do we provide access to all the companies operating in a given market? Do we have commercial relationships or ownership ties that might make us feature one company above another?

We commit to providing you with clear and informative answers on all points such as this, so we have gathered the relevant information on this page.