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Compare car finance

Find our best car loan deals

  • Quick and easy to use
  • Doesn’t harm your credit score
  • See your chance of being accepted

We compare offers from a wide range of lenders from across the market

We work with over 30 loan providers including most of the big brands to help you borrow the money you need.

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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, or lease it for a time before having the choice to buy it outright.

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What types of car finance are there?

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

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Hire Purchase (HP)

This is one of the most common options for car purchase. 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

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Car Loan

You can take out an unsecured personal loan 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

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Personal contract purchase

Put down a non-refundable 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 and take out a new PCP on a fresh car

What is the best financing option for you? 


When deciding what car finance option to choose, 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) may suit you best.

 

Personal loan

HP (Hire Purchase)

Personal Contract Purchase (PCP)

Deposit needed

No

Likely

Likely

You own the car straight away

Yes

No

No

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

Yes

Yes

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

Secured (against the car) 

No

Yes

Yes

Excess mileage charges

No

Yes

Yes

Monthly payments

Yes

Yes

Yes

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How much will a car loan cost?

What you’ll pay for a car loan will depend on a few factors including:

  • Interest: An APR is added to the loan’s value and you’ll pay back the loan and interest in monthly instalments until the loan is repaid in full. The APR or interest rate you’ll be charged is determined by your credit score. If you’ve had debt problems in the past or you have never had credit before you might be offered a higher interest rate making your car loan more expensive.
  • Loan duration: The loan’s term or length will also affect the cost of your car loan. The longer the term, the smaller each monthly repayment will be as they’re being spread over time. But you’re likely to end up paying more interest overall with a longer loan.

Our car loan calculator can give you a good idea of how much your loan will cost you, by factoring in APR and the length of the term to work out the total cost you’ll need to repay.

 

Know where you stand with a pre-approved car loan

When you’re pre-approved for a car loan, you can relax knowing the deal you see is the deal you’ll get. You’ll be a step closer to driving that new, sweet ride with peace of mind in the passenger seat. You’ll know where you stand with the facts to help you make the right choice.

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Apply with confidence

When you’re pre-approved, the loan amount, duration and interest rate are all confirmed 

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Tailored to you

When you know what you’ll be able to borrow and how much it will cost, you can choose a loan that’s right for you 

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You’re in safe hands

Knowing the facts upfront puts you in control. You’re less likely to be rejected when you apply, so your credit score is protected 

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.

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How to compare car loans with MoneySuperMarket

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

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It doesn’t take long

Tell us a little about yourself, your finances
and the loan you want

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We’ll browse the market

We’ll search through car loans from a wide
range of lenders on the market

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Compare loans

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

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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.

secured loan is a loan you can take out that’s tied to an asset of yours as security. For example a mortgage is a type of secured loan, and the asset would be the house you take the mortgage out on – when you repay the loan the house is yours, but if you don’t repay then the lender could seize your house. These are uncommon for car loans.

An unsecured loan isn’t tied to any collateral, and as a result you normally need at least a fair credit score to qualify. There is also often a maximum amount you’ll be allowed to borrow. Most standard personal loans are unsecured.

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.

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

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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.