Car Loans

Car Loans

If you are contemplating buying a new vehicle, have a read of this guide. It will help you to figure out which financing option is best for you.

Savings

If you have cash saved up in the bank it would be better, long term, to pay off as much as of the car as possible. This should reduce the amount you have to pay in interest for any finance you take out.
Always remember to keep some of your savings. This will cover you for any future emergencies, so you are not left short of money.

Personal Loan

Personal loans can be obtained through banks and finance companies.  Personal loans can be borrowed from £1000 upwards and usually are borrowed for 6 months or more.
There are many different types of personal loans that you can take out as a car loan, and they primarily vary in APR. It is a good idea to shop around for the best personal loans available (UK Loans offers a comparison table and an online application to help you find the cheapest loans available)
A person’s credit rating is often a big factor in how much interest they will pay on a car loan. A poor credit rating may result in a high APR loan or even being refused one. There are ways of improving your credit rating.
A Personal Loan is often the quickest and most straightforward way to get a car loan. Applications can be made online, in person or over the phone.

Hire Purchase

Buying your car using Hire Purchase is a common way of getting a car through a dealership. The dealership will arrange the financing so it is relatively simple.
This kind of car loan is paid back over monthly instalments and from between 12 to 60 months. There is normally a 10% deposit to be paid.
Hire Purchase is secured against the vehicle. Therefore you will not own the car until the last payment. But, the benefit is that it is not secured against your house.

Personal Leasing

This involves borrowing the car from the dealer for a set period of time and paying an amount of money each month. This is often what happens when a person gets a company car.
The money paid each month usually covers services for the car. But, the car is only allowed to drive a certain amount of miles, when the car exceeds this number of miles there could be extra charges.
The car never belongs to you and upon completion of the contract will be returned to the garage.
Always have a set budget for monthly payments and make sure you can live comfortably after paying the car loan.
Search the market for the best available APR.
Read the fine print, sometimes repaying the car loan early may cost more money.

Part Exchange

If you already have a car you may be able to exchange it for the car you have bought. This will reduce the price of the vehicle you are buying, which would mean your car loan would be cheaper.

If you feel like you are ready to look for a car loan and apply, UK Loans offers a Personal Loan Search and a Personal Loan Comparison page.

UK Loans always advocates responsible lending; if you feel like you are struggling with Debt please go to the money advice service for help

Use our award winning technology to search our panel of lenders for some of the most competitive rates.