What are the Benefits of Car Finance?

The benefits of buying a car on finance far outweigh the negatives.

Have you been thinking about buying a new car but are unsure whether to pay for it using saved cash or taking out a finance deal?

Well, we're here to give you nine reasons why car finance is the recommended way to buy a car and how making this decision can help you not only now, but also in the long run.

When you're looking to buy something of such high value, it can be anxiety-inducing figuring out everything you need to ensure you get the most out of your money and ultimately, a good deal.

Do you already have a car on finance? Discover your equity position today and see if you can switch or save money on your deal.

Check your deal now

But getting a car on finance is the perfect way to drive without any hassle or worry. You know exactly what you're getting now, at each month of your deal, and your options when you no longer want the car.

There are several different options available to you too, which means you're not restricted to just one type of deal. Let us explain all of the pros and why you need to get yourself a car on finance.

Your payments are fixed

You are in the driving seat from the get-go, as you can control how many months your finance deal lasts and the ideal amount you wish to repay per month.

You know exactly how much you'll be spending each month which will help you budget for everything else, and you won't experience any unexpected surprises or costs during your term.

It just helps to keep you stress-free and allows you to drive with no concerns.

You don't need the best credit score

The terms 'credit score' and 'credit history' are ones that can strike fear into most when applying for any sort of loan, but with car finance, you don't necessarily have to have the best.

Applying for a personal loan with a low credit score would potentially put you at risk of rejection as banks are a little more strict than car finance lenders.

But Car Credible can offer you a free no-obligation quote that doesn't affect your credit score so you can view your options before making a decision.

You can improve your credit score

Having a car on finance proves to other future lenders that you are able to afford and make repayments across a large stretch of time, therefore boosting your credit score and the likelihood of being improved again in the future.

This can also mean that down the line, your repayments and APR could be lower because you have a track record of repaying a loan.


Use savings elsewhere

Having savings set aside for a rainy day is critical because you just never know when something may break that needs replacing or a personal circumstance may mean you don't have enough income to live off of.

Using those savings to buy a car might seem like a good idea at the time, but you just never know what might happen in the future when those funds could come in need.

You don't need to sell your car in future

There are a few options available to you which means you don't have to try and sell the car on yourself once you've decided you no longer want it.

That goes for your current car or once you've bought your new one.

The options that will be available to you are part-exchanging your current car for something new, handing the car back to the finance company and walking away, or paying the balloon payment and keeping the car.

Your car acts as a deposit on a new one

When you decide you no longer want your car, providing that you're in a positive (or nearly positive) equity position, we can help you to trade in your car and put the profit from that down as a deposit on your next vehicle.

Check your deal now

Get an upgraded car

Buying a car on finance allows you to afford a car you perhaps might not be able to afford if you were paying with cash.

With the majority of finance deals, you're only paying to cover the cost of part of the car and subsequently, you could get a top-of-the-range model with lowered payments.

You also have the availability to pay it off in as many months as you want so can stretch your monthly repayments for as long as you require.

Security benefits

If you buy a car with cash, that car is yours and your responsibility if and when something occurs to it.

Under a finance deal, you could add a maintenance deal as part of your monthly repayments to include servicing, for example.

Change your car every few years

On a finance deal, you have the option of handing the car back and switching to something new every few years.

It's ideal for those that get bored with the same car or like the latest technology updates.


Can you get car finance on benefits?

It can be challenging to find a car finance lender that is prepared to offer someone on benefits a car finance loan, but it can be done. Car Credible works with a panel of lenders that specify in car finance loans for those with bad credit, are on benefits, have CCJs and more.

Should I get a PCP or HP finance deal?

It depends on what you want to get out of your car finance deal. If you know you want to own the car outright at the end of the deal, then HP is preferred. If you know you want to switch cars every few years, then go for PCP.