Buying a Used Car on Finance

Car finance is an ever-growing industry with tons of options for both new and used cars. The different types of finance that you can take out can be quite overwhelming and you may be unsure of who you should go to for the best deal.

With the increase in used car dealers around the country, you can be sure to get a fair and competitive deal and they will be able to understand which type of finance is best to suit your needs and budget.

Typically, you'll be able to take out a loan that lasts anything between 12-60 months, depending on your preference and how quickly you'd like to make the repayments on the car.

We could help you terminate your car finance deal early in order to help you upgrade your car, or simply help to save you money if you feel you're paying too much. Find out if you are eligible by checking your deal below for free. 

Buying a used car is not too dissimilar to buying a new one in terms of you being able to visit the dealership, take it out on a test drive, and get a full understanding of what comes with the car.

The only difference is it'll be a few years old, racked up some mileage, and had one or more previous owners. But that's why it's cheaper than buying a brand new car and will help to save you some money.

Buying a used car on a PCP finance

This is the most popular way to take out a car finance agreement in the UK and is ideal for those that want to change their car regularly and make lower monthly repayments. 

It’s a variation of a Hire Purchase (HP) but instead of repaying the entire cost of the vehicle, you only pay for the depreciation of the car. 

At the end of the agreement, you can choose to make the optional final payment (balloon payment) to own the car outright or hand the car back to the finance company with no further liability, provided you have taken care of the car and have not exceeded the mileage allowance.

Buying a used car on HP finance

This is another of the more popular and straightforward finance agreements. 

You don’t own the car until you have paid all sums due in terms of the hire purchase agreement. You are essentially paying in agreed monthly instalments until you have paid the entirety of the total price. 

The interest rate is generally fixed and you'll typically pay less of it over time because you are paying the total of the car off faster than you would in a Personal Contract Purchase (PCP).

Leasing a used car

This is a type of finance you generally get with new cars but depending on the dealer, they may be able to offer you a deal. It's more likely you'll be required to do your own research to find yourself a good deal.

Once you've found that, you'll sign your contract stating how long the lease lasts and how much you agree to pay each month.

The price will be dependent on how much the car you wish to lease should depreciate in value over time. However, it's often more difficult to predict how quickly a used car will depreciate than a new car, so it's possible a dealer will inflate the price due to uncertainty.

Buying a used car with a personal loan

It doesn't matter whether you are buying a new or used car when it comes to taking out a personal loan as it is all controlled by the bank rather than the dealer or a third-party finance provider.

This could be a good option if you don't have a large deposit to play with and you want to own the car outright straight away. It also means you are dealing directly with your chosen bank which may be a more bespoke customer experience.

How Car Credible can help you apply for finance

If you want to get a car on finance, we can help you find the perfect car finance deal using our car finance calculator. You can customise exactly how long you wish to make the repayments, a suggested amount you'd be willing to pay per month, and the type of finance you'd like.

When you are in a position to upgrade or save money on your car, or you simply want to take out a new car finance deal, you can see the car finance offers available to you. 

Once you click on your preferred offer, you will be directed to the relevant finance company's website where you can continue your application directly with them.

Our finance partners work with a panel of lenders and you can have confidence that you will have been offered a wide range of the best options to suit your needs and budget.

Your preferred finance company can help you find your new car if you don’t already have one in mind. You should contact your current car finance company to receive your early settlement figure and once that’s paid off and you are happy with the new offer you have selected, you can sign the deal and drive away with your new car.