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Car Finance or Personal Loan – Which is Best for You?

Couple comparing Personal Loan and Car Finance

Millions of new and used vehicles are purchased using finance every year in the UK. When securing funds, most motorists choose between two popular options – car finance or personal loan. Both are designed to get you behind the wheel of your dream car, though each option has its own pros and cons.

Car finance: options and ownership

Car finance is an umbrella term used to describe several types of auto loans, including options like Hire Purchase (HP), Personal Contract Purchase (PCP), Personal Contract Hire (PCH) and Conditional Sale. Each option is slightly different in terms of deposits, monthly payments, legal ownership and end-of-term options.

Pros of car finance:

Lower initial costs: Initial deposits are generally lower for car finance, compared to purchasing a vehicle outright. This can be an advantage if you want to retain capital and keep your upfront expenses as low as possible.

Flexibility in ownership:

What’s more flexible, car finance or loan? Depending on the type of agreement, car finance generally offers options at the end of the term, including owning the car outright or upgrading to a new model.

Access to new models: Car finance options like Personal Contract Hire are designed to get you into the driver’s seats of the latest models. The chance to drive newer or more expensive models that may otherwise be outside your budget is a major benefit for some motorists.

Maintenance included: Some car finance options include maintenance packages which takes the stress out of ownership.

Cons of car finance:

Monthly payments: While monthly payments may be lower, they accumulate interest over time which can increase the total cost of your loan.

Ownership delays: With some car finance options, you don’t own the car outright until the final payment is made. This can be an important factor when deciding between car finance or personal loan.

Personal loan: simple and straightforward

A personal loan sees you borrow the full amount needed to purchase a car outright. You drive away as the legal owner of the vehicle and make monthly repayments to your lender to cover the cost of the loan, plus interest.

Pros of personal loans:

Instant ownership: With a personal loan, you own the car from day one. For many motorists, this makes the car finance or loan decision easy.

No mileage restrictions: Unlike some car finance agreements which come with mileage restrictions, personal loans give you the freedom to drive as much as you like without worrying about penalties.

Cons of personal loans:

Higher interest rates: Unless you have a stellar credit score, personal loans can come with higher interest rates compared to some car finance options.

Strict eligibility criteria: Securing a personal loan generally requires a good credit score, and eligibility criteria can be more stringent.

Higher initial costs: Personal loans often call for larger upfront payments.

Enjoy tailored auto finance with My Car Credit

Need help deciding between car finance or loan? Want to find out if car finance is easier to get than a loan?

At My Car Credit, we appreciate that every motorist is unique. That’s why we work with every client to build tailored financing solutions to match your budget, personal preferences and ownership goals.

Give us a call on 01246 458 810 to find out more about car finance options 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

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

What is a Conditional Sale for a Car?

While prices have dropped a little in 2023, the average cost of a new small car in the UK sits at more than £21,000. Opt for larger models and RRP increases significantly. Combined with issues like inflated petrol prices and the cost of living crisis, this figure puts car ownership out of reach of most motorists. With many Brits feeling the pinch, it’s no wonder auto finance options like conditional sale have surged in popularity over recent years.

There’s plenty to learn when it comes to car finance and conditional sale is one of many terms you may recognise. But what is a conditional sale exactly and how can it help you secure the keys to your dream car? Read on as we dissect everything you need to know about conditional sales, including how agreements work, the benefits and what to expect when signing a contract.

Understanding the basics of conditional sale

What is a conditional sale and how can it help you own your own car? The term describes a popular finance model that allows you to spread the cost of car ownership over a set time period, usually between two to five years. It’s essentially a personal loan that’s secured against the vehicle and funded by a lender. The finance provider pays for the car outright and maintains legal ownership of the vehicle for the duration of the contract.

As the borrower, you make regular repayments to the lender which cover the total cost of the car, plus interest accrued over time. After making your final payment, ownership of the vehicle is transferred to you. The model is straightforward and transparent, making conditional sale a great option for Brits who like to keep things simple. It offers a direct route to ownership without complications like mileage limits, wear and tear penalties or options to return the car or renew the contract at the end of the agreement.

Whether you’re looking at compact urban commuters like the Ford Fiesta or spacious, family-friendly SUVs like the Hyundai Tucson, Conditional Sale can be used to finance a huge range of makes and models. This flexibility is another key benefit associated with conditional sales.

Conditional sale vs hire purchase

What is a conditional sale agreement and how does it compare to hire purchase? If you’re familiar with the car finance landscape, you may draw comparisons with conditional sale and hire purchase (HP). And you’d be absolutely right. Conditional sale and HP share similarities and work in almost the same way, though there’s one major difference.

When a HP agreement winds up, you’ll need to pay a modest “option to purchase” fee to assume legal ownership of the vehicle. In comparison, conditional sale sees you automatically assume ownership after the final payment is made.

How conditional sale works

Now we’ve covered what a conditional sale agreement is, here’s a step-by-step breakdown of how the process works:

Choose your make and model

Like other auto finance options, conditional sale starts with choosing your dream car. Whether it’s a fresh out the showroom model or a used gem with low mileage and a great service history, conditional sale offers the flexibility to choose a vehicle that suits your personal budget, lifestyle and driving preferences.

Agree on terms

When you’ve chosen your new set of wheels, it’s time to agree on the terms of your conditional sale contract. This includes the duration of the agreement, along with your interest rate.

Make your deposit

Most conditional sale agreements start with an initial deposit designed to offset the total cost of the car. Keep in mind that your deposit can also help bring down your monthly payments and reduce the total amount of interest paid over the duration of the agreement.

Pay monthly instalments

The remaining balance of your car loan, minus your initial deposit, is split into fixed monthly payments. These payments cover both the principal loan amount as well as interest. For many Brits, the sense of financial stability that comes with conditional sale contracts is a major benefit.

Claim ownership

Unlike some auto finance options where you may have to return the vehicle or make a balloon payment at the end of the contract, conditional sale is all about easy ownership. After the final payment is made, you’re officially the legal owner of the car.

Why choose conditional sale?

Knowing what a conditional sale is gives you a few clues as to why it’s so popular with British motorists. Here’s a closer look at some of the top benefits:

A road to ownership

Ownership is the end goal of conditional sale contracts. Your payments cover the cost of the car which means you’re continually working towards ownership. There are no mileage restrictions, hidden costs or headache-inducing calculations to navigate. Instead, simply make your final payment and drive away as the legal owner of the vehicle.

No balloon payments

For many motorists the concept of balloon payments used in models like PCP can be frustrating. In contrast, conditional sale distributes the total cost of the car evenly over a pre-determined time period. This can make budgeting more predictable and means you’ll enjoy full ownership at the end of the lease.

Mileage flexibility

Conditional sale liberates you from the mileage caps that typically accompany PCP agreements. You’re free to drive as much as you like without worrying about breaking the terms of your contract and incurring penalties.

Customisation options

With full ownership, you have the freedom to modify your vehicle as you please. Whether it’s a unique paint job, upgraded tech or personalised accessories, the car is yours to customise.

Take the wheel with My Car Credit

Ready to get behind the wheel? My Car Credit can help you secure the best conditional sale deals, tailored to your personal needs. Our friendly team is here to answer all your questions about what a conditional sale is, provide guidance and ensure your road to car ownership is as smooth and stress-free as possible.

Looking for something different? At My Car Credit we specialise in matching clients with the best auto finance options for their needs. Every motorist is different which is why a one-size-fits-all approach never cuts it. Instead, we carefully assess every application to find the perfect match.

As well as conditional sale, we offer other popular car finance options like Hire Purchase (HP), Personal Contract Purchase (PCP) and Personal Contract Hire (PCH). It’s this open-minded approach, combined with access to a wide range of high street and non-traditional lenders, that gives us a competitive edge over other brokers.

Give us a call on 01246 458 810 to find out more 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

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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

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What is Hire Purchase? – Simple HP Explanation

Someone reseacrching what Hire Purchase is on a phone

Whether you’re eyeing a brand-new Nissan Qashqai or a used Volkswagen Golf, hire purchase (HP) is one of the most popular auto financing options in the UK, up there with personal contract purchase (PCP). The model allows you to spread out the cost of car ownership over time and secure the keys to your dream car, without hefty upfront costs.

You’ve probably come across the term when researching automotive finance options. But what is hire purchase exactly, and how does it pave the way to affordable, stress-free car ownership? In this guide, we’ll unpack everything you need to know about hire purchase, breaking down all the moving parts so you can navigate the auto finance landscape with confidence.

Hire purchase explanation

Hire purchase is a finance option that combines the benefits of car ownership with the practicality, affordability and predictability of structured payments. It’s one of the simplest types of auto finance and spreads out the cost of the car, plus interest, over a set period of time, usually between one to five years.

Think of it as a well-planned road trip. You get to enjoy the ride but instead of absorbing the entire journey cost upfront, it’s broken down into manageable pit stops, i.e. monthly payments.

How HP agreements work:

Choose your car

This is the fun part and involves researching vehicles, scheduling test drives and choosing your dream car. It’s always a good idea to crunch your number before you start the search to get an idea of how far your budget will stretch and what types of vehicles you can realistically consider.

Make an initial down payment

Most HP agreements start with a down payment, though this isn’t always essential. That said, it’s generally in your best interest to make an initial deposit as it will help bring down your total loan balance and minimise your monthly payments, as well as interest costs. If you already own a car, trade ins can be a great way to raise cash for a deposit.

Monthly instalments

After making a deposit, the remaining cost of the car is spread out across fixed monthly instalments. These payments cover both the cost of the car and interest applied by the lender.

Ownership

Unlike personal contract hire (PCH) where you hand back the keys at the end of the agreement, hire purchase steers you towards full ownership. Once the final payment is made, the car becomes yours outright.

Hire purchase explained: a closer look at the benefits

Easy, affordable and predictable, it’s no wonder HP is one of the most popular auto finance options in the UK. Here’s a little more information to help explain what hire purchase is and why the model wins over so many Brits:

Budget-friendly beginnings

Thanks to affordable down payments, hire purchase allows you to kickstart your car ownership journey without depleting your savings. This sets you up for success on the road to car ownership.

Predictable payments

Monthly HP instalments are fixed which makes budgeting easy. No surprise expenses, just predictable monthly payments.

A road to ownership

One of the top benefits of hire purchase is the option to own at the end of the agreement. After your contract has expired, the car is yours to keep.

Flexibility

Whether you’re eyeing a zippy commuter, sleek convertible or family-friendly SUV, hire purchase offers loads of flexibility when it comes to makes and models. You’re free to choose a vehicle that best suits your budget, lifestyle and driving preferences.

New or used

Can you use hire purchase for a used car? Absolutely! As well as the flexibility to choose different makes and models, HP agreements offer the freedom to finance new or used vehicles. Auto finance isn’t just for showroom cars. Analysts estimate a huge 1.5 million used cars were financed by British motorists in 2023, with agreements worth £23 billion. The trend is set to continue in 2024 as Brits continue to use HP agreements to fund used car purchases.

Factors to consider when opting for Hire Purchase

Now you know more about what hire purchase is and how the model works, let’s take a closer look at some important factors to consider before committing to an agreement.

Understand interest rates

Like any financial agreement, it’s important to understand the interest rates applied to your hire purchase deal. Over time they will have a big impact on the total cost of your loan.

Evaluate your budget

While hire purchase makes car ownership accessible, it’s essential to carefully evaluate your budget before committing. Crunch your numbers to ensure your monthly instalments align with your financial situation.

Check for early repayment options

Some HP agreements allow for early repayment, an option that can potentially reduce the overall cost of your loan.

Factor in depreciation

All cars depreciate over time and vehicles financed using HP are no exception. Be sure to factor this into your decision making process if the value of the car at the end of your HP agreement is important.

Start your journey to ownership with My Car Credit

If ownership is your ultimate goal, hire purchase could be your ticket to ride. As covered in our hire purchase explained guide, the format is easy to understand and offers lots of flexibility when it comes to makes and models. Plus, you’ll enjoy the stability of structured payments which takes the stress out of budgeting.

At My Car Credit, we’re committed to helping Brits secure the best auto finance deals, including Hire Purchase agreements. Contact us today to find out more about how to qualify for HP finance and kickstart your journey to car ownership. Our friendly team is always happy to chat, answer questions and give you the full hire purchase explanation.

As well as hire purchase, we specialise in industry-leading deals on other car finance options, including popular models like personal contract purchase (PCP) and personal contract hire (PCH).

Give us a call on 01246 458 810 or email us at enquiries@mycarcredit.co.uk to find our more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Long Does It Take to Buy a Car?

Car Finance or Personal Loan – Which is Best for You?

What Does ‘Finance’ Mean When Buying a 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

car finance credit score hire purchase hp Jan24 lenders new car used car

Why is the Fiat Panda so popular with drivers?

When it comes to reliable small cars, there are any number to choose from. From the Hyundai i10 and Kia Picanto through to the Ford Fiesta and VW Polo, the market is flooded with practical, affordable cars.

One enduringly popular competitor in the field is the Fiat Panda. It’s a great all-rounder that’s also pretty cheap to run and ideal for nipping around urban spaces.

So, why is the Fiat Panda so popular with drivers? We find out …

Fiat Panda – the specs

Affordability

There’s no arguing with the facts – the Fiat Panda is resolutely affordable. Admittedly, that means that the standard spec is pretty spare, with items like power steering, six airbags, and central locking included. Whilst this doesn’t stand up to some rivals on the market, if you’re looking for a car that won’t break the budget, it’s hard to argue with the Fiat Panda.

Not only is the car affordable, it’s also pretty cheap to run. The standard Panda sits in between insurance group ratings 3 and 6, so you’ll snag wallet-friendly coverage. It also depreciates slowly over time, which is something to consider if you’re planning to pop it on the resell market.

Great for urban centres

The Panda’s engine is now a TwinAir model, with 84bhp and a range of 0 to 62mph in 12.7 seconds. It also has a high driving position for great all-round visibility, as well as soft suspension for managing bumpy roads. Plus, there’s a ‘city button’, which makes steering light and easy and makes both parking and cramped manoeuvring easier.

This means that it’s a super urban vehicle, but don’t expect the car to manage long or fast motorway trips. You’ll have to work the gearbox – and you’ll notice road and wind noise at 70mph. Alternatives like the Hyundai i10 or VW Up! are far better options if you’re looking for a drive that can tackle long, fast journeys with greater ease.

Design

The Panda’s aesthetics are on the funkier side, but there’s no drawback to having a car with personality. The body design is based on Fiat’s ‘squircle’ theme (squared-off circles), which informs the interiors too.

The trim can feel a little cheap and plastic, but the Panda is renowned for its affordability, so you get what you pay for. It also comes in a range of colours – the Italian blue is particularly eye-catching.

Practicality

The Panda is a little boxy in appearance and has a high roofline. This helps with visibility, as well as overall head and leg room. The cabin is therefore pretty comfortable for four adults, but the boot is on the smaller side, with a 225-litre capacity.

It’s not going to blow you away, but it’s still a respectable small car that offers more by way of comfort than you’d expect.

Find car finance for a Fiat Panda

Get behind the wheel of a Panda today with financing from My Car Credit – we can even help drivers looking for car finance with a poor credit rating.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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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

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Should I Buy a BMW Used or New?

When it comes to prestige, nothing compares to BMW. The Bavarian-based auto manufacturer is synonymous with luxury and has launched a myriad of iconic models over the decades, including the high-tech 750iL driven by James Bond. One of the biggest decisions you’ll make when shopping for a BMW is whether to buy new or used. There are a lot of factors at play, which is why we’ve penned this insider’s guide to help you decide, “should I buy a used BMW or splurge on a new model?”

The pros of buying a new BMW

Enjoy the latest bells and whistles

If you’re the kind of person who loves to get their hands on the latest iPhone the day it’s released, you’ll love the satisfaction of getting behind the wheel of a new BMW. Driving out the dealership, you’ll have access to all the latest technology, safety features and luxe extras.

For example, the latest BMW 8 Series Coupé is packed with innovative technology to enhance the driver experience and on-road performance. As well as standard features, you’ll have the option to upgrade to exclusive extras like a Bowers & Wilkins Diamond surround sound system. These are the kinds of perks you just won’t get buying second-hand.

“Should I buy a BMW with an electric motor?” If you’re in the market for an electric BMW, buying new guarantees the latest battery technology. Buy new and you’ll enjoy longer range, faster charge times and a smoother driving experience.

Peace of mind with a new vehicle warranty

Manufacturer warranties usually last for between 6 to 12 months and cover almost all servicing, repairs and maintenance. So, in the first year of ownership you can expect to pay very little when it comes to upkeep.

Savour that “new-car smell”

The intoxicating aroma of freshly-oiled leather, squeaky clean plastic and fresh upholstery is something that comes with all new BMWs.

The pros of buying a used BMW

Unlock big savings

“Should I buy a used BMW?” Value for money is one of the biggest pros of purchasing a used BMW. Cars depreciate in value from the moment they’re driven out the dealership, which means you can unlock big savings by opting for a BMW that’s a few years old.

Enjoy the same features

Many motorists choose to buy new to secure the latest features and tech. However, many manufacturers launch virtually the same model for several years in a row as it’s simply not possible to make big upgrades every year. After a “run” of three or four years, the model will undergo a full revamp and be relaunched with a new exterior, interior, engine and novel features. Are you asking yourself, “should I buy a used BMW if I love the latest tech?” Well, if you do your research and buy a model at the start of its multiyear run, you won’t be missing out on much for the next few years.

Take advantage of the Approved Used BMW scheme

The Approved Used BMW scheme takes the stress out of buying a new car with a laundry list of benefits. Vehicles accepted into the program enjoy comprehensive manufacturer protection, including an unlimited mileage BMW warranty for a minimum of 12 months. This includes any work that needs to be done for the vehicle to pass a MOT test. Every vehicle is also independently checked by qualified BMW mechanics to verify mileage and servicing history.

The much-loved BMW 3 Series

“Should I buy a used BMW from the 3 Series range?” BMW 3 Series models have been delighting drivers for more than 40 years. It all started with the BMW E21, a sporty, compact executive car launched in the 1970s. The second-generation E30 enjoyed similar success, selling more than 2.3 million units. Since then, the BMW 3 Series has maintained its reputation for luxury and prestige. With decades of different models to choose from, it’s no surprise BMW 3 Series models are hugely popular with second-hand buyers.

If you’re looking to buy new, the Seventh Generation BMW G20 launched in 2019 is a great option. It was unveiled at the Paris Motor Show and features a streamlined silhouette and state-of-the-art driver assistance systems. The model has been around for several years now, which means there’s a good amount of availability on the second-hand market.

The Sixth Generation F30 is another gold-standard choice when it comes to pre-owned BMWs. This model was launched in 2011 and manufactured right up to 2019, which means you’ll see some big age variations on the second-hand market. “Should I buy a BMW F30 more than 10 years old?” As always, it’s worth doing your homework when it comes to servicing history, especially if you’re looking at older models.

Teach an old BMW new tricks

“Should I buy a used BMW if I want extras like a heated steering wheel?” Thanks to a brand-new subscription service, it’s never been easier to customise your second-hand BMW. The manufacturer made headlines earlier this month with the launch of a subscription service for extra features. Using the ConnectedDrive Portal, motorists can unlock certain features that weren’t activated when the car was purchased.

For example, heated front seats can be purchased for £15 per month, while a heated steering wheel sets drivers back £10 per month. For another £10 per month, you can also activate automatic high beams, while access to Driving Assistant Plus active cruise control costs £35 per month. The manufacturer revealed that many models already have the hardware built in, it’s simply a matter of activating it.

The service is particularly useful for second-hand car owners, who may want to add extra features the previous owner didn’t splurge on. BMW also says the subscription model allows drivers to “experiment” with different features and decide whether they’re worthwhile before they purchase them outright.

Get into the cockpit of a BMW today

“Should I buy a BMW?” Absolutely. Whether you’re in the market for a pre-loved BMW i3 or a sleek new BMW 8 Series Convertible, we can help you to find the perfect car finance to get you into the driver’s seat of your dream car.

Our car finance checker makes it easy to crunch the numbers, without affecting your credit score. The process is quick, easy and allows you to shop around for the best BMW car finance deals before making a decision. For more details, get in touch with our friendly team today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

5 Best Car Picks for Elderly Drivers

What’s the Best Month to Buy a Car?

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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

3 series bmw new car new vs used car used car

How to Calculate Finance on a Second Hand Car

New cars might stand out for their state-of-the-art features and ‘new car smell’, but used cars have plenty of their own benefits too. There are more second-hand motors on the road than ever before, which means you could find yourself in a position where you want to purchase one. However, there are some myths surrounding the industry, the main one being that they’re so much cheaper than brand new, so you can afford to buy a used vehicle outright.

In reality, most people can’t since second-hand cars are still quite expensive. Despite being much more affordable than brand new models, you’re still looking at a total of several thousand pounds, which exceeds most people’s rainy-day fund. Thankfully, second-hand car finance makes it more affordable to buy a used car and make a substantial purchase less substantial.

Still, you need to know how much the deal will cost before you sign on the dotted line. Otherwise, the agreement might not be suitable. With that in mind, here’s how to calculate finance on a used vehicle.

Can you get finance on a second-hand car?

There’s a perception that second-hand car finance isn’t available because of the cost of used cars. According to Money Saving Expert, new motors depreciate at a rate of 27% in the first 12 months, meaning vehicles that are only twelve months old are much cheaper than their counterparts.

Yet, 27% might mean that the value is still above £15,000 or £20,000, which means you’re going to need help from a lender. Turning to car finance is essential as the deals are designed for drivers’ needs. It’s worth remembering that private sellers won’t offer the service as they simply want to offload the vehicle and make a small profit.

Of course, you’re not guaranteed to be accepted just because you applied. There are factors that determine the outcome, so let’s take a look at a few:

Credit rating

Your credit rating, or credit score, is the first thing lenders will look at before signing you off. If it’s not high enough, you might need to take certain measures to boost it, such as paying bills more punctually or avoiding hard checks. Another option is to use your credit card more regularly because you might be rejected if you don’t have any evidence of your spending habits.

The length of the deal

A longer agreement will play into your hands. Typically, car finance deals can range from anywhere between three to seven years, with six being the average. While you will pay extra the longer it lasts, the monthly payments are smaller because they are stretched over 72 months instead of 36 months.

Size of your downpayment

You can lower your finance premiums by putting down a bigger downpayment. The deposit reduces the risk for lenders and therefore can lower the rate you pay. After all, they already have a portion of the loan back, depending on the size of your deposit. However, it’s worth mentioning that you don’t need to pay a deposit to take out car finance.

At My Car Credit, we know how important it is for our customers to be accepted. That’s why we analyse a range of factors before deciding, and why we’re always happy to offer help and advice to any applicants.

How to calculate second-hand car finance

We understand that numbers can confuse people, which is why lots of motorists decide to avoid second-hand car finance in the first place. It can seem too complicated, so they steer clear of what they don’t understand.

That’s a healthy strategy. However, you don’t have to fall into this category because working out the cost of car finance is simple. You only have to do the following:

Take the cost of the car
Divide it by the number of months in the agreement
Add in the rate of interest

Once you have done that, you can clearly see how much you will pay overall and at different periods throughout the deal. For example, you can see the monthly fees, and use them to calculate your overall incomings and outgoings. As a result, you will know whether a second-hand car is affordable in a matter of minutes!

My Car Credit’s car finance calculator

To make matters even easier, at My Car Credit, we have developed a car HP calculator that takes all the stress and confusion out of the process. Whether you want to know how much your monthly payments will be or how much car finance you qualify for, our online tool does the maths on your next car for you in seconds. Just type the relevant details into the easy-to-use interface and let the calculator do the rest.

If you want to learn more about how My Car Credit can help you land the second-hand car finance deal of your dreams, please don’t hesitate to contact us right away.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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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

second hand car used car

Age vs Mileage – Which is More Important for a Used Car?

When it comes to buying a used car, age and mileage are two of the key considerations which will affect both the condition of the vehicle and its price tag – as well as your decision whether to seal the deal or not. But is used car mileage more important than age, or vice versa? The answer isn’t quite as simple as either of those options.

What’s in a number?

As key indicators of how far through its lifespan a vehicle is, age and mileage are both important points to consider when weighing up whether to buy a used car or not. However, they’re both entirely relative.

For example, a 10-year-old car with 100,000 miles on the clock could be in far better shape than a five-year-old one with half that mileage, if the owner has been more assiduous in their maintenance of the vehicle. Similarly, a car that has been used mostly on motorways and for long-distance journeys is likely to suffer fewer problems than one which has spent the majority of its life in the stop-start traffic of a busy city.

With that in mind, it’s important to look at the car’s condition, service record and list of previous owners before making a decision. Used car mileage and age are both useful indicators of its value – but with no context, they can only tell you so much.

What’s the best age to buy a used car?

Following on from all of the points discussed above, there is no one-size-fits-all answer to this question. The best age to buy a used car will vary from vehicle to vehicle, with the car’s previous history a far bigger factor in whether it represents a sensible purchase or not.

However, it may be helpful to consult some statistics to inform your decision. According to the Society of Motor Manufacturers & Traders (SMMT), the average age of a used car at the time of scrappage was 13.9 years in 2015 in the UK. The average age of a used car on the road, meanwhile, was 7.8 years.

With that in mind, it makes sense to steer clear of cars over eight years old, since you’ll be buying one above the average age. Generally speaking, buying a second-hand car that is under five years old is likely to stand you in good stead for many years. Of course, an older model will almost certainly be significantly cheaper, while there are definitely good deals to be had even with cars that are in double figures.

Do your homework

Taking all of that information into account, the simple answer to the question posited in the title of this article is that neither age nor mileage is more important than each other in isolation. Instead, each will have a bearing on the car’s overall condition, but that condition must take pride of place when it comes to making a final decision when you’re buying a car or looking to finance a used car online.

Don’t rush into any deals, make sure you do your due diligence and research a car thoroughly before you sign on the dotted line. Sticking to that advice will ensure you avoid any nasty surprises and keep you on the straight and narrow when it comes to buying your next vehicle.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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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

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