Jan24 Archives - Page 13 of 15

No Deposit Car Finance – How Does it Work?

New car bought with no deposit car finance

You’ve fallen in love with the perfect dream car, it’s ready to go and you’re raring to drive it straight off the forecourt. Only one problem remains – paying for your new wheels.

Car finance offers the perfect solution for buying the car of your dreams without needing to use your savings and pay in one go. You get the option to pay your car off in manageable monthly payments, over a period of your choice.

However, some people do worry about needing to find a deposit. This is typically a large chunk of the overall payment and if you do not have a car to trade in, it can be unaffordable for some.

Luckily, you can now get car finance without having to pay an initial deposit. Read on to discover how this works and whether you could get no deposit car finance.

The types of car financing

Car financing is a very common method used when buying a car. For the majority of us out there, paying for a car outright is unrealistic, especially if you’re looking to get a new vehicle. Car financing gives you the option to pay off the cost of your car monthly, rather than paying the cost in one go. There are a few different types of car financing available that you can choose from, with the main two being hire purchase and personal contract purchase:

Hire purchase (HP)

Hire purchase is one of the most popular car financing methods. You can either set up an HP deal with your car dealer directly or with a third party broker or lender. Generally, you may get a better deal with an external company than the car dealership so it’s good practice to shop around.

With many car finance options, a deposit of around 10% of the purchase price is required to secure the financing – we’ll get to the zero deposit options later in the article.

HP contracts can last anywhere between two and five years, with monthly payments, plus interest, paying off the value of the car. Once your contract is up and you have completed all your payments, the car is yours. You may have to pay a final payment that is higher than your monthly cost to secure the vehicle, but this will be agreed when buying the car so there will be no hidden surprises.

So, once your contract has come to an end and all payments have been made, you are then the owner of the car and can do with it whatever you please.

Personal contract purchase (PCP)

A personal contract purchase (PCP) is similar to a hire purchase in many ways. The car is paid off in monthly installments rather than one lump sum. You have the option of paying a deposit, which does reduce your monthly payments and overall interest. Despite their similarities, there is one clear difference between HP and PCP car financing deals.

With a HP agreement, you are paying off the full value of the car each month and so at the end of the agreement, you own the vehicle. However, with a PCP agreement, you are only paying off the depreciation of the car each month, rather than the full value.

So, you are essentially paying the difference between the car’s value when you purchase it and the estimated value of the car at the end of the agreement. In essence, you are renting the car from the dealership for a set number of years. At the end of the contract, you can make a choice between paying a lump sum to keep the car, trading in the vehicle for a newer model or returning the car entirely to the dealer.

No deposit car finance

So, now we’ve covered the two most popular forms of car financing, it’s time to take a closer look at how you can secure a car finance deal without having to fork out the initial deposit. It sounds too good to be true, right? Driving away in your dream car without having to pay a penny upfront. But it is in fact a reality.

Due to the huge competition out there when it comes to car financing options, from car dealerships to independent companies, there are a number of deals now available to allow companies to stand out from the crowd.

Typically, the best no deposit car finance deals are found from third party companies. This includes car finance price comparison websites such as Confused.com, which compare the best deals from across the market.

Alternatively, car finance brokers such as My Car Credit will offer you a broader panel of lenders who cover all credit profiles, from excellent through to bad.

No deposit car finance is available from most of My Car Credit’s lender panel. This means if you find a car worth £7500, a lender from My Car Credit would pay for the vehicle from the dealership and offer you a repayment plan over your chosen term, leaving you with nothing to pay upfront.

Secure the best deal

If you’re looking for a new car and want to know your budget or perhaps you’ve found your dream vehicle and are wanting to get driving as soon as possible, the no deposit car financing deals from My Car Credit can get you on the road in no time. We have a number of options available to suit you, no matter your circumstances.

Get a car finance quote today using our quick and easy calculator. You can then apply online and get an instant, online decision on car finance. If you need any help, feel free to get in touch with our friendly team to see how we can help you drive away in your new car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

A Guide to Buying Your First Car on Finance

Man holding keys after buying first car on finance

Alongside graduating from school, college or university, starting work and moving out (bye-bye parents, hello freedom), buying a car is a pivotal moment for any young person. However, without the bank of mum and dad, many struggle to afford the lump sum payment, which is why car finance is an attractive and realistic option.

In this short guide, we’ll explain everything you need to know about buying your first car on finance, from improving your credit score and setting budgets to securing the best possible deals. While we’ve tailored this guide mostly to young first-time buyers, the advice given applies to anyone searching for a more affordable way to get on the road.

What is car finance?

Car finance is an accessible means of owning the car of your dreams. Instead of covering the full cost upfront, you can spread payments over several months or years in reasonable, bite-sized chunks.

A personal contract purchase (PCP) is a popular way of financing a car. Agreements often last between three to five years, and at the end you can either make a final payment to keep the vehicle, return it or use the resale value towards buying something brand-new.

You can also opt for Hire Purchase (HP) if you prefer the idea of owning the car at the end of the agreement without needing to pay a final lump sum payment.

To secure a finance agreement, you’ll have to pass a credit check and lender criteria and it helps to make a small deposit upfront (usually 10% of the car’s total cost).

How to improve your credit score

Before lenders consider your application, they’ll undertake a thorough credit check to assess your potential risk. The overall score determines who qualifies for a loan, the amount you can borrow, interest rates and credit limits. 

To ensure you’re in the best position possible, you’ll need some active credit history to show you can manage money responsibly (this is especially important for students without full-time employment). Below are three simple ways you can improve your score and bolster your chances of securing finance.

Check you’re on the electoral roll

Lenders check whether you’re on the electoral roll to protect themselves against fraud. If you’re a student, you can register at your home address or student address.

Apply for a credit card and use it sensibly

Using a credit card is the easiest way to show lenders you can keep track of your outgoings. However, if you’re worried about debt or have a low credit rating, a prepaid card is an alternative option, working similarly to a pay-as-you-go mobile capping your spending. Students may also be eligible for a student credit card with a low credit limit. 

Mobile phone contract 

If you’ve never had credit, a mobile phone contract is a simple way of improving your score. They work much the same as repaying car finance, albeit on a much smaller scale, demonstrating your ability to meet monthly repayments.

Four things to do before buying your first car on finance

Set your budget and plan for additional costs

The most crucial part of buying any car is setting a budget and sticking to it, no matter how tempting a set of shiny new wheels might be. So, before entering a finance agreement, prepare to meet monthly repayments by choosing a realistic model. If possible, negotiate an arrangement that suits your income stream.

However, it’s not just the initial value of the car you must consider – plan for running and maintenance costs too. These include:

Car insurance (often more expensive for new and young drivers)
Fuel costs, especially if you plan to travel frequently
MOT tests, scheduled maintenance and repair costs
Road tax (there are a few exemptions)

If you’re not sure how much you can borrow, read this handy guide.

Decide whether you want a used or new car

When it comes to buying your first car, a key consideration is whether you should buy new or used. While the decision is ultimately personal, depending on your budget and immediate needs, consider the benefits of both routes before making a final decision.

The advantages of a used car include affordability (the initial price is often between 30-50% less, meaning lower monthly repayments), cheaper insurance (a massive incentive for new drivers who are already facing premiums) and discounted tax.

However, there’s more choice when buying a new car and improved safety features, such as automatic emergency brakes, adaptive cruise control and intelligent sensor systems that reduce collisions. Surprisingly, new models are also quite affordable thanks to the range of generous finance deals on offer.

Find a guarantor

If you’re a student, you’re still eligible to buy a new car on finance. Although, without a full-time income, lenders may need additional reassurance that you can meet monthly repayments. In these cases, a guarantor will help bolster your application.

A guarantor is usually a close friend or relative, with a good credit history, who agrees to continue repayments if you’re unable to make them. While they can’t take on the loan (it will always be in your name), they act as a safety net to mitigate risk.

Entering into a Guarantor Loan is a big responsibility for both parties. It is therefore important that you both understand your obligations, as well as the potential risks.

Double check the agreement before signing

You know how the saying goes – it’s better to be safe than sorry. With that in mind, double-check the terms and conditions of your finance agreement to avoid hidden charges and dubious stipulations.

Things to watch out for include:

Mileage caps which restrict the amount you can travel each year (exceeding the limit incurs charges anywhere between 3p to 70p per mile)
Late payment policies which penalise you for missing repayments
Damage charges and service requirements
“Free” insurance policies that sound too good to be true

Do you need help finding a finance agreement?

Buying your first car is nerve-wracking at the best of times without worrying about hefty upfront costs, which is why we aim to make the process as straightforward and affordable as possible with the best finance deals anywhere in the UK.

To learn more, call us on 01246 458 810 or drop us an email at enquiries@mycarcredit.co.uk – one of our friendly specialists will be in touch shortly. For additional information, you can also visit our website where we have hundreds of helpful blogs and articles to browse through.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

PCP Term: Everything You Need to Know

No Deposit Car Finance – How Does it Work?

What is a Guarantor Loan?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

buying first car car buying credit rating credit score first car Jan24

Why You Should Steer Clear of Low Rate Car Finance Promises

Frustrated lady on laptop trying to find low rate car finance

Buying a brand-new or used car is often a serious investment. It can be tempting to offset costs by opting for a car finance agreement that guarantees astonishingly low interest rates.

However, when something sounds too good to be true, it usually is! In reality, finance companies can't promise low rate car finance for all applicants. This is because they’re calculated based on individual credit scores and circumstances.

How are interest rates calculated?

So, shiny promises aside, how is car finance interest calculated? The outcome depends on many variables, including a person’s credit history, income, desired vehicle model and deposit.

Without a doubt, a person’s credit score is the most significant factor. This is a rating everyone has based on their financial history. This rating helps lenders to determine potential risk, interest rates and credit limits. It’s used to gauge someone’s trustworthiness and likelihood to pay back instalments. A good credit score increases your chances of securing a lower interest rate and overall monthly repayments.

However, at My Car Credit, we understand that unforeseen circumstances can impact a person’s credit rating through no fault of their own. This is why we’re open to accepting applications from people with less than perfect financial backgrounds.

If you’d like to improve your chances of securing finance, there are plenty of simple ways to bolster your rating and generate more favourable interest rates before applying.

We can help you find the best possible interest rates

Whilst we would never promise you a low interest rate, we are in a great position to find you the best deal on car finance for your circumstances. We have the largest panel of lenders out of any UK car finance broker. This gives us the best chance of matching you to a lender with the most desirable interest rates.

To start your journey, speak to one of our knowledgeable team members by calling 01246 458 810 or emailing enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

No Deposit Car Finance – How Does it Work?

Who is the Legal Owner of a Car on Finance?

How Many Years in a Car Loan Term?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

apr car finance calculator Jan24 low rate car finance

What is a Good Credit Score for Car Financing?

Finding your ideal set of wheels is only half the battle when it comes to securing car finance. In reality, the most crucial part of the process is getting a credit check so lenders can assess how likely you are to repay your loan.

The credit check will reveal your credit score – a rating based on financial history that helps lenders determine who qualifies for a loan, potential risk, interest rates and credit limits. So, what counts as a ‘good’ score?

What is a good credit score?

Having a good credit score increases the likelihood of securing a low-interest loan, meaning you pay less overall. In contrast, falling below the range makes it harder to find funding.

Unfortunately, it isn’t easy to provide a definitive answer or universal credit score as the key credit reference agencies (Call Credit, Equifax, Experian and TransUnion) have independent scoring systems. Plus, most lenders adhere to internal guidelines.

However, a recent Experian report provides some clarity. According to their findings, in September 2019 the average credit score was 715 for a new car loan and 662 for a used car loan. Despite this, their website categorises someone as “good risk” if their score falls between 881-960. The contrast in figures suggests it’s relatively easy to obtain finance even if you fall below the desired limit.

The scores calculated by TransUnion and Equifax are more generous. TransUnion defines “good risk” as between 604-627 while Equifax goes even lower at 420-465.

Demystifying “credit history” and “credit report”

When you’re researching your credit score for car finance, some other terms you may come across are credit history and credit report. So, how do these relate to your credit score?

Firstly, your credit history is what credit reference agencies use to calculate your credit score. It includes credit utilisation, monthly repayments, bill payments and other financial factors.

This is compiled into a credit report, which includes your credit history alongside your debt to income ratio, address history and even whether you’re on the electoral roll.

Your credit report includes your credit score, which is generally what a finance company will use as eligibility criteria for a finance agreement.

Another term you might see is credit rating. This is simply another way of referring to your credit score.

How it affects your car finance application

Now onto the main point of interest – how do credit scores impact car finance deals? The answer is simply down to risk and reward.

Personal contract purchase, hire purchase and personal contract hire are all ways you can borrow money to finance a car. Credit scores from the main credit reference agencies are essentially a barometer of how reliable you are when you borrow money.

If you have a high credit score (good or excellent), it shows that you’re a reliable borrower that’s more likely to keep up with monthly payments. As a responsible borrower, you’re less of a risk for finance companies. This means you’ll likely meet the minimum credit score required to be approved for car finance. In many cases, it may also unlock the best car finance deals with lower interest rates.

On the flipside, a low credit score from a credit reference agency indicates bad credit history. This could impair your chances of being approved for car finance, but it’s not the only factor lenders take into consideration. While many lenders have a minimum credit score, different lenders will have their own criteria for drivers with a poor credit history.

You can increase your chances of success with a larger initial deposit, for example, or by finding the best deal for your circumstances with more favourable repayment terms. Smaller monthly instalments repaid over a longer term may be easier for you to keep up with, for example.

What does My Car Credit define as a “good” credit score?

If you use our free car finance calculator, you can select which credit profile best suits your circumstances. The information button defines each credit profile, with “good” described as:

You are on the electoral roll
You are a home owner or long standing tenant
You have a stable employment history
You have current credit arrangements with occasional missed payments
You have no CCJs, which stands for county court judgement

Evolution Funding, the broker behind My Car Credit, uses a combination of Experian and Equifax scoring combined with their own clever algorithm to determine which car finance lender is best for your circumstances. Evolution Funding defines a good score as being an ‘Evo Score’ of 650 and above. However, they cater for customers with scores much lower than this so don’t feel disheartened if you have a less than perfect credit score. There is also lots of advice available in our Help & Advice section on how to improve your credit score.

How we can help

Whether you have a higher credit score or a poor credit rating, My Car Credit is dedicated to helping all drivers secure the right car finance in the UK. We’ll guide you through your car finance options, such as personal contract hire, personal contract purchase and hire purchase to find one that’s right for you and your credit score.

If you have a compromised credit history, you may still be eligible for finance. There’s just a little more work to be done before acquiring a loan. That’s where My Car Credit can help. Using your loan application details, our team works hard to find a suitable deal from our panel of lenders. Check our handy online calculator to see if you are eligible for car finance.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Am I eligible for car finance?

No Deposit Car Finance – How Does it Work?

Can You Pay Monthly for a Used Car?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

credit reference agencies credit score equifax experian good credit score Jan24

What is a Car Finance Soft Search? – All Your FAQs Answered

Just like applying for a mortgage or increasing your bank borrowing limit, seeking approval for car finance often calls for a soft credit search. So, what is a soft search credit check? Carried out by the lender, a car finance soft search is designed to determine your eligibility for credit. This information is used to build a credit profile and establish if you’re a suitable applicant.

Ultimately, soft searches help to answer questions like how much to lend and at what interest rate, as well as whether you’re eligible for any special deals or rates. Want to know more about car finance soft searches? Read on as we answer all your burning questions, including what does a soft search show, where does the financial information come from and whether there are any benefits of soft search.

What is a soft search?

Also known as a soft credit check, soft searches reveal your personal financial history without leaving a footprint on your credit report. They allow lenders to follow up and confirm information you have offered which is used to generate a quote.

What does a soft credit search show?

One of the biggest questions asked by car finance applicants is what do lenders see on a soft search? The short answer is a snapshot of your personal credit profile. This includes information such as credit card limits, phone contracts, mortgages, personal loans and any other relevant material that helps determine whether you’re likely to pay back the loan. If you have a County Court Judgment (CCJ) court order registered against you for failing to repay money this will also appear.

What does the ‘soft’ mean?

While car finance soft searches do reveal valuable information, they don’t leave a signature on your credit profile. Instead, soft searches remain invisible to third parties and lenders, and are only visible to the applicant.

What are the benefits of car finance soft search?

One of the major benefits of car finance soft searches is the invisible footprint. They offer lenders a snapshot of your credit history and score without leaving a permanent mark on your personal report.

While hard credit searches are not necessarily a burden, having too many appear on your report can spook prospective lenders and imply you’re in constant need of credit. Hard searches that don’t result in approval can be particularly dangerous as they suggest you’re credit hungry but haven’t managed to win over any lenders due to bad credit history.

On the other hand, soft searches are designed to give car finance lenders peace of mind while keeping your credit report clean. So, when applying for finance there’s no reason at all to hold back on a soft credit search.

Will a car finance soft search affect my credit report?

The answer to this question is a firm no. While a soft credit search car finance check will reveal information on your credit history, it won’t leave a footprint on your file and your rating will remain unaffected.

Where does car finance soft search information come from?

In the UK, lenders generally use three major credit reference agencies to determine your credit score – TransUnion, Equifax and Experian.

Can soft credit search car finance help me?

While the concept of credit checks can be intimidating, if you’ve got nothing to hide, they can actually help you secure a better deal on your loan. At My Car Credit, our applicants fall into one of two categories – prime or subprime. Applicants with good credit status fall into the prime category and are offered a transparent actual annual percentage rate (APR) or ‘real rate’ upfront.

If you have a compromised credit history, you’re still eligible. There’s just a little more work to be done before securing a loan. Using your application details, our team work hard to find a suitable deal from our panel of more than 34 lenders.

Car finance soft searches also empower you with the freedom to shop around for a good deal before making your final decision on a lender. While hard searches could have a negative impact on your credit history, soft searches allow you to seek pre-approval for loans without leaving a mark on your credit history.

What’s the process?

Less formal than a hard credit check, soft searches are designed to be quick, easy and stress free. At My Car Credit, the process starts with our cost of car finance calculator, before completing a short online application form. This shouldn’t take more than a few minutes and covers details such as your name, address, employment history and date of birth.

Once the form is completed, we’ll run a quick check and let you know the results online, as well as via text and email. Everything is transparent and we’ll never carry out any searches without your permission.

Do bear in mind that once you decide to proceed with your application, some lenders will perform a hard search.

Is there a fee?

At My Car Credit, we don’t believe in charging for the soft search application process. There are no extra charges associated with our soft credit search and typically the results will help you find the right deal for your circumstances.

The final verdict

Ultimately, a car finance soft search is a great way to reassure a lender and secure a loan without compromising your credit score. With no fee, no footprint and the potential to unlock excellent rates, there are virtually no downsides to carrying out a car finance soft search. A win-win for applicants and lenders.

Still have more questions on what a soft credit search is? Reach out to the team at My Car Credit to find out more about how a car finance soft search can help you secure the best possible loan.

Whether you have a glowing credit record or are struggling with black marks like debt or a CCJ, our team is on hand to help you secure finance and get behind the wheel of your own car as soon as possible. We’ve also built a huge library of help and advice articles covering everything from how to improve your credit score to what repayment terms are best for you.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Leasing vs Finance: What’s the Difference and Which is Better?

Am I eligible for car finance?

What is the Oldest Car a Bank Will Finance?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance application credit profile credit score Jan24 soft search

Everything You Should Know Before Buying Your First Car

man smiling whilst thinking about buying your first car

Have you just passed your driving test and are ready to hit the roads? Perhaps you’ve been saving up money for a while now and are finally ready to purchase your first vehicle. Buying your first car is an exciting – albeit daunting – process. Not only are you making your biggest purchase yet, but you’re gaining a sense of independence and freedom.

Being a motorist can be expensive, and there are many costs to consider. Purchasing the right vehicle that fits your budget is the first and most important step to make. Below, we have a list of the essential things you should keep in mind as you start shopping for your first car. These should help you manage your finances throughout the process.

1. Assess your needs

Do you regularly haul goods? Need extra seats to transport the kids and family dog? Or are you looking for a nifty hatchback to squeeze into on-road parking spots? Assess your needs to narrow down the search.

For example, if you commute long distances to and from work every day, you will want a fuel-efficient vehicle that can handle lots of mileage. For that reason, you might consider a newer car with very few miles on the clock. If you need plenty of room in the back for transporting goods, you might consider a minivan or SUV over a hatchback. The right vehicle should complement your lifestyle and daily needs.

2. Determine your budget

Buying your first car goes beyond having the money to pay for it. You have to factor in the additional costs, such as vehicle tax, car insurance, MOTs, servicing and fuel. Work out how much you can comfortably afford to spend monthly and how much your deposit could be if you decided to finance your first vehicle.

Financing gives you more freedom to break up the cost of a whole car into easy and affordable monthly payments, which can help you buy the right vehicle for your needs. Consider working with car credit specialists to land the right finance plan for your budget.

3. Review your credit report

Lenders will check out your credit history when you’re applying for car finance. Even if you don’t think you have a history, if you have a phone plan, credit card or rent a flat, these items will be marked on your report.

Review your credit report to ensure there are no errors or anomalies, correcting any mistakes before you purchase your first vehicle. This can save you a lot of interest over the long-term.

4. Consider second-hand

The new car smell, pristine seats and the sparkle of a fresh paint job may have you eyeing up a brand-new vehicle. But this isn’t the only option you should consider. A new car’s value plummets the minute you drive it off the dealership’s lot, and you may be able to find a suitable used vehicle for a much better price.

Consider looking at used cars, and you may be surprised to find a nearly-new make and model of your dreams.

5. Do your due diligence

Check any car over before buying to make sure it’s roadworthy. If you don’t know what you should be looking for, take a knowledgeable friend or car mechanic with you to be sure.

Check the tyres, oil, engine, mileage, brakes, MOT history, and ensure all functions and features are in full working order. It’s also worth finding out if the vehicle has been in previous accidents or if there have been modifications or repair work that could affect it further down the line.

6. Take the car for a test drive

Most dealerships will allow you to drive the car before you buy it, allowing you a bit of time to get familiar with the handling. When going on a test drive, listen out for any noises that don’t sound right (any banging, hissing or screeching) and test out the speed (when the speed limit allows) that could bring underlying issues to the surface.

7. Negotiate the price

Whether you’re buying a new or used vehicle, the price is almost always negotiable. You may be able to save thousands of pounds if you haggle. Don’t be afraid to question the price. Most dealerships actually expect you to negotiate.

Even if there isn’t much wiggle room on the price, there’s no harm in asking. In fact, the dealer may be prepared to throw in some extras to sweeten the deal, such as free car mats or roadside assistance coverage.

8. Read through the paperwork carefully

Most car agreements are binding, which means that once you sign, there is little you can do to change the terms and conditions. That’s why it’s worth spending a few minutes reading through the contract carefully. If you aren’t sure what something means, don’t be afraid to ask the dealer for clarity.

You should also ensure that the logbook (V5C), service record and car manual comes with the vehicle as well as any spare tyres and keys.

10. Enjoy the process

Owning your first car is a big milestone to reach. Even though the process of buying a car can be overwhelming, the more planning you do beforehand, the easier it will be. With competitive financing rates and hundreds of great cars to choose from, your options have never been better. Car ownership is rewarding, and once you’ve secured reliable financing, hitting the open roads in your new ride will be that much sweeter.

Financing for your first car

Ready to take the plunge on buying your first car? At My Car Credit, we make the car financing process easy, seamless and hassle-free for first-time car buyers across the UK. Our team of financing experts will walk you through every step of the process to ensure you feel informed and confident with your transaction.

Whatever car you’re looking for, we can help you break up the cost into bitesize pieces. Calculate car finance and apply online or call us on 01246 458 810 to see how we can help you.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

7 Advantages of Used Car Hire Purchase

What is the Oldest Car a Bank Will Finance?

How to Refinance a PCP Balloon Payment

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

buying first car car buying car buying tips driving test first car Jan24

Buying a Used Car on Finance to Avoid Public Transport

man on public transport wearing a mask thinking of buying a car on finance

As different parts of the UK begin to emerge from lockdown, those who cannot operate remotely are now being encouraged to return to their workplace. At the same time, social distancing remains a key way to limit the spread of the virus.

This has created a conundrum for those who rely on public transport to get from A to B. The Department for Transport has admitted that physical distancing on buses and trains may be all but impossible. This has fuelled fears that those who use it may be putting themselves and others at risk.

What can be done to ensure you comply with government guidelines as much as possible, without sacrificing your livelihood? Buying a used car on finance could be the perfect compromise.

Public transport comes with potential risk

The chances of contracting coronavirus just by walking past someone who has it are relatively remote. However, the chances rise the longer that you remain in close quarters with other people. On busy buses and trains, keeping an adequate distance of two metres from others is not feasible. This can result in many people being caught between a rock and a hard place when it comes to returning to work.

For that reason, the government has advised using public transport only as a last resort. Official advice recommends walking or cycling for all or part of the journey if possible. In addition, travelling at off-peak hours and using stations and routes which are less frequently populated by others can help. Of course, for those working in a major city on a standard 9 to 5 schedule, following those options could be inconvenient at best and impossible at worst.

That’s especially true if long distances must be covered or if your town or city is not conducive towards easy bicycle riding. Fortunately, there is another way to get around the problem – by acquiring your own vehicle. This has the benefit of bypassing close contact with other individuals altogether.

Car finance to the rescue

Given that the coronavirus pandemic has brought with it an equally concerning economic crisis, making a large purchase might be the last thing on your mind right now. However, the health benefits of owning and driving your own car should be not taken lightly. When managed using appropriate car finance, you may be surprised to discover that buying a car is nowhere near as complicated or onerous as you might have previously imagined.

At My Car Credit, we pride ourselves on treating all applicants equally and fairly. Regardless of your circumstances and financial history, we consider all applications and deliver a decision within minutes. Our application process has also been designed with the end user in mind. This means the entire experience is made as simplistic and stress-free as possible.

We are in the privileged position, as an established credit broker with the largest panel of lenders, to find you the most favourable deals on the market. We can even help you to locate the car of your dreams through our extensive network of dealerships all across the country. To find out more about our services, or to start the ball rolling on your next car purchase today, simply use our car finance calculator and apply online. We’re waiting to hear from you!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Can You Pay Monthly for a Used Car?

Bank Loan or PCP: Which is Right for You?

Car Finance for First Time Drivers: A Beginner’s Guide

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car buying coronavirus covid-19 Jan24 online car buying online car finance public transport

5 Different Ways to Pay for a Car

white car in dealership being bought using a car loan

Once you have taken a test drive in your shiny new motor, it can be tempting to throw caution to wind and not worry too much about how you’re going to pay for it. Unfortunately, this is all too common for car owners across the UK. Before you sign on any dotted line, you should know how you aim to pay for the vehicle, whether you decide to hand over cash or take out car finance.

If you’re in the market for your next ‘new-to-you’ vehicle, take a look at the different ways to pay for a car.

How to pay for a car

Cash
As long as you’d have enough savings left over to cover other major purchases or unexpected costs in the future, paying cash is a great way to buy a car. Paying cash means that you own the vehicle straight away. If you get into financial difficulties, you have the option to sell the vehicle and keep the cash from the sale. If you have a car finance agreement such as a leasing or hire purchase, this isn’t possible.
If you don’t have quite enough savings to buy the car outright, you could use them to give you the biggest deposit possible, so you end up spending less on loan interest.
Before you pay cash, think about your future finances. Are you planning any other large purchases over the next few years, such as buying a house? If so, you may want to save some cash and consider financing the vehicle.
Hire Purchase
This option is increasingly popular for the purchase of new cars. Typically, you will put down a deposit of 10%, and then make fixed monthly payments over an agreed time period. This means that you won’t own the vehicle until the last payment has been made. However, this route does make purchasing a vehicle more manageable. Even those motorists with poor credit can get accepted for car financing.
Hire purchase agreements are convenient to arrange and can be competitive for newer vehicles. There is also a fixed interest rate and monthly payments with no annual mileage conditions or fines for wear and tear.
Personal Contract Purchase (PCP)
This type of car finance deal is similar to a hire purchase agreement, but you usually make lower monthly payments. With a personal contract purchase, you have an ‘optional final payment’ at the end of the car finance plan, often referred to as the ‘balloon payment.’ You are able to defer some of the cost of the car to be paid at the end of the plan, making the monthly payments cheaper.
Instead of getting a loan for the total cost of the car, you get a loan for the difference between its sale price and its predicted value at the end of the hire agreement.
In a PCP, you decide how much of a deposit you want to make and estimate your annual mileage and the length of the contract. Typically, this type of car finance plan is between 3 and 5 years.
At the end of the term, you can:
• Trade the car in and start over again;
• Hand the car back to the dealer and pay nothing; or
• Pay a final payment (balloon payment) and keep the vehicle.
Conditional Sale
A conditional sale is similar to a hire purchase agreement, but you pay higher monthly payments and don’t have a fee to pay at the end of the term. Like a hire purchase, you do not own the car until the car finance plan has been paid in full. Typically, you put down 10% of the car’s value as a deposit, and repayment terms last between 2 and 6 years, making this option ideal for those who want to keep the car at the end of the plan without paying a final fee.
Credit Cards
Using a credit card to buy your new car can be a cost-effective way of getting a new set of wheels that allows you to buy the car outright on the day. To buy all or a portion of a car with a credit card, you must first ask the dealer if they accept credit card payments as many do not. If they do, they could charge a hefty processing fee that you need to consider.
It is best to use a credit card that has a 0% interest offer to buy the car outright and then split the repayments over the interest-free period so that the balance is cleared by the time you’re due to be charged interest.
Putting your new car on a credit card gives you repayment flexibility as long as you meet the minimum payment every month. However, if you only repay the minimum repayment every month, it may take much longer to repay your borrowing amount.

Getting a car on finance? Here’s what to look out for

Before you take out a car on finance, here are a few things to look out for:

• Make sure you can afford the monthly payment – not just now, but for the whole term of the loan.
• Ask the lender what will happen if you struggle to pay one month, and what options you have if you couldn’t afford to pay.
• Compare the total cost of borrowing, including all charges over the full term of the loan.
• Compare interest rates from different lenders. Remember that a larger deposit usually means you have a lower interest rate.
• Consider working with car credit specialists to land the right finance plan.

Find out if you can get car finance

At My Car Credit, we aim to help you through every step of the car finance process to make the process as hassle-free as possible.
For an instant quote, and to see what car finance plan you can be eligible for, please use our simple car finance calculator.

We are open 7 days a week, and our website is full of helpful tips, guidelines and answers to any questions you have.
For more information, call us on 01246 458 810 or email us at enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

I want to buy a car on finance, how much can I borrow?

How Do Car Finance Calculators Work?

Bank Loan or PCP: Which is Right for You?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options car loan cash credit card hire purchase Jan24 PCP

Can I Pay a Car Loan with a Credit Card?

Woman paying her car loan using a black credit card online

Buying a car can be expensive. When you're in the market for a new or used vehicle, it's smart to shop around to ensure you're getting the right car at the best price. Part of this is considering whether to use car financing.

Unless you have enough cash stashed away to pay for your new ride, you’ll need a personal loan or car financing to complete the purchase.

If you’re feeling adventurous, you may be tempted to purchase the car through a credit card. But can you buy a new car with a credit card? Will you have to pay interest? They’re both good questions – here’s what you should know.

Can I buy a car with a credit card?

Since the Consumer Credit Act of 1974, there have been a lot of changes to the options consumers have when using a credit card. So, the simple answer is yes – you can purchase a card with a credit card. But before you do, you should find out if the dealership even offers that option.

A good early question is whether or not they accept credit cards. Most of the time, they won’t let you charge the entire purchase price of your car. Some dealers will have a limit on the value of an individual purchase, so check before you sign up.

The process of buying a car on a credit card is the same as buying anything else on a credit card. The full amount is charged to the card, and then you pay the credit card company back over time while paying interest on the outstanding amount.

Unlike some other loans, you won’t have to pay a set amount each month. This gives you more freedom to choose how much you pay back each month, as long as you meet the minimum monthly direct debit payments.

Are there downsides to buying a car on credit?

As mentioned previously, certain car dealerships may not accept credit cards as complete payment for a car purchase. If a dealership does accept credit card payments, be aware that there may be a surcharge, which is often an unexpected expense.

If you don’t qualify for a 0% rate with a credit card provider, keep in mind that the typical APR rate is 10-15%, which is higher than a typical bank loan. Since most 0% deals also only last a couple of years, it would be best to either pay off the card before the 0% offer ends or transfer the balance to another card. In this case, it can be difficult and time-consuming to keep on top of it to avoid unnecessary fees or unwanted credit card debt.

Top Tip: If APR is new to you, read our guide on car loan APR.

When should you consider buying a car with a credit card?

If you’re thinking about buying a new or used car with a 0% interest rate offer, then it can make sense to charge it to your credit card. Before you go this route, however, make sure you can afford to pay off your car quickly. If you don’t, you may end up paying standard APR rates – which are higher than the rates you’d receive from a good car financing company.

Secure, reliable car financing

While you can buy a car with a credit card, doing so isn’t always the right decision. With My Car Credit, securing reliable and affordable car financing has never been easier.

We’re a fully FCA-compliant credit card company, so our customers know exactly what they’re getting from us. We work with a range of motorists to find the right finance plan that suits their needs, from people with poor credit to those who are self-employed.

To get started on your tailored car financing, use our free car finance calculator and then apply to get a decision on car finance without impacting your credit profile. We look forward to working with you to help you pay for your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Am I eligible for car finance?

Advantages of Cars on PCP with No Deposit

Will I Get Accepted for Car Finance?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options car loan credit card Jan24

Can I Buy a Car with a Credit Card?

Man handing over blue credit card to buy a car

Buying a car can be expensive. When you're in the market for a new or used vehicle, it's smart to shop around to ensure you're getting the right car at the best price. Part of this is considering whether to use car financing.

Unless you have enough cash stashed away to pay for your new ride, you’ll need a personal loan or car financing to complete the purchase.

If you’re feeling adventurous, you may be tempted to purchase the car through a credit card. But can you buy a new car with a credit card? Will you have to pay interest? They’re both good questions – here’s what you should know.

Can I buy a car with a credit card?

Since the Consumer Credit Act of 1974, there have been a lot of changes to the options consumers have when using a credit card. So, the simple answer is yes – you can purchase a card with a credit card. But before you do, you should find out if the dealership even offers that option.

A good early question is whether or not they accept credit cards. Most of the time, they won’t let you charge the entire purchase price of your car. Some dealers will have a limit on the value of an individual purchase, so check before you sign up.

The process of buying a car on a credit card is the same as buying anything else on a credit card. The full amount is charged to the card, and then you pay the credit card company back over time while paying interest on the outstanding amount.

Unlike some other loans, you won’t have to pay a set amount each month. This gives you more freedom to choose how much you pay back each month, as long as you meet the minimum monthly direct debit payments.

Are there downsides to buying a car on credit?

As mentioned previously, certain car dealerships may not accept credit cards as complete payment for a car purchase. If a dealership does accept credit card payments, be aware that there may be a surcharge, which is often an unexpected expense.

If you don’t qualify for a 0% rate with a credit card provider, keep in mind that the typical APR rate is 10-15%, which is higher than a typical bank loan. Since most 0% deals also only last a couple of years, it would be best to either pay off the card before the 0% offer ends or transfer the balance to another card. In this case, it can be difficult and time-consuming to keep on top of it to avoid unnecessary fees or unwanted credit card debt.

Top Tip: If APR is new to you, read our guide on car loan APR.

When should you consider buying a car with a credit card?

If you’re thinking about buying a new or used car with a 0% interest rate offer, then it can make sense to charge it to your credit card. Before you go this route, however, make sure you can afford to pay off your car quickly. If you don’t, you may end up paying standard APR rates – which are higher than the rates you’d receive from a good car financing company.

Secure, reliable car financing

While you can buy a car with a credit card, doing so isn’t always the right decision. With My Car Credit, securing reliable and affordable car financing has never been easier.

We’re a fully FCA-compliant credit card company, so our customers know exactly what they’re getting from us. We work with a range of motorists to find the right finance plan that suits their needs, from people with poor credit to those who are self-employed.

To get started on your tailored car financing, use our free car finance calculator and then apply to get a decision on car finance without impacting your credit profile. We look forward to working with you to help you pay for your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

PCP: Is It Worth It?

How Many Years in a Car Loan Term?

PCP Term: Everything You Need to Know

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score

Representative Example

Borrowing £7,500 at a representative APR of 13.9%, annual interest rate (fixed) 13.85%, 47 monthly payments of £201.38 followed by 1 payment of £211.38 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £2,176.240, total amount payable is £9,676.24.

My Car Credit is a credit broker and not a lender.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance options credit card finance options Jan24

You’ve fallen in love with the perfect dream car, it’s ready to go and you’re raring to drive it straight off the forecourt. Only one problem remains – paying for your new wheels.

The types of car financing

Hire purchase (HP)

Personal contract purchase (PCP)

No deposit car finance

Secure the best deal

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The final verdict

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1. Assess your needs

2. Determine your budget

3. Review your credit report

4. Consider second-hand

5. Do your due diligence

6. Take the car for a test drive

7. Negotiate the price

8. Read through the paperwork carefully

10. Enjoy the process

Financing for your first car

Rates from 9.9% APR. Representative APR 10.9%

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