Car Finance Deals Made Simple

Car finance is a way of spreading the cost of a vehicle into affordable monthly payments instead of paying the full price upfront. In the UK, the most common types are Hire Purchase (HP) and Personal Contract Purchase (PCP). With HP, you pay a deposit and then monthly instalments until the car is fully yours. PCP allows lower monthly payments with the option to return the car or pay a final lump sum (often called a balloon payment) to own it outright. Other forms of finance may include personal loans, which are unsecured and can be used to buy a vehicle. Lenders will consider factors such as your credit score, income, and affordability before making a decision. For official guidance on finance agreements, you can visit the Financial Conduct Authority website.

Yes, it is possible to get bad credit car finance, though approval will depend on your individual circumstances. Many lenders now use affordability-based assessments rather than relying solely on your credit score. If you have missed payments, defaults, or CCJs, some lenders on our panel may still be able to offer you a deal, provided the repayments are manageable. It is important to understand that interest rates (APR) are likely to be higher for customers with poor credit compared to those with excellent credit histories. A good first step is checking your credit report and ensuring the information is accurate. You can order a free statutory credit report from services recommended by Gov.uk. Improving your credit score over time by paying bills on time and keeping credit usage low can increase your chances of securing better finance offers in the future.

To apply for car finance in the UK, you’ll usually need to provide personal and financial details. These typically include your full name, date of birth, three years of address history, employment status, income, and monthly outgoings. Lenders also ask for details of the vehicle you want to finance, including its cost and whether it is new or used. A soft search may be carried out initially to show potential finance options without affecting your credit score. If you proceed, the lender will perform a hard search, which may appear on your credit file. Having documents such as bank statements and payslips available can speed up the process. The MoneyHelper website provides official advice on preparing for credit applications.

Both PCP (Personal Contract Purchase) and HP (Hire Purchase) are popular ways to finance a car, but they work differently. With PCP, you pay an initial deposit followed by monthly instalments over a fixed term. At the end, you can either return the car, pay a balloon payment to own it, or trade it in for a new model. PCP is attractive for people who like driving newer cars every few years. HP works differently: you also pay a deposit, followed by higher monthly payments compared to PCP, but when the agreement ends, you automatically own the car outright. There is no balloon payment at the end. The best choice depends on whether you want eventual ownership or prefer flexibility. The Financial Conduct Authority provides impartial information on both agreements.

When you apply through MotoFi, we use a soft credit search to match you with potential lenders. A soft search does not affect your public credit file, meaning it cannot be seen by other lenders and will not reduce your credit score. However, if you choose to proceed with a lender’s offer, they will perform a hard search. A hard search will appear on your file and may affect your credit score, particularly if you make multiple applications in a short space of time. It is important to only apply for finance when you are genuinely ready to go ahead. Keeping track of your applications and reviewing your credit file regularly helps you stay in control. You can learn about credit checks and your rights on Gov.uk.

The cost of car finance depends on several factors, including the vehicle price, deposit size, interest rate (APR), length of the agreement, and your credit profile. Lenders are required to provide a representative APR to give you an idea of the cost most applicants receive. However, your personal rate may differ depending on your circumstances. For example, someone with an excellent credit score may secure a lower interest rate, while those with a poor credit history may face higher costs. Other factors such as annual mileage (for PCP agreements), optional extras, and early settlement can also impact the overall cost. Before agreeing, you should always review the total repayable amount, not just the monthly instalments. The Money Advice Service explains how APR works and how to compare finance deals safely.

No, MotoFi does not charge you a fee for using our service. Our role as a credit broker, not a lender, is to connect you with FCA authorised car finance providers. You can view tailored finance options free of charge and with no obligation to accept. If you decide to go ahead with a finance agreement, MotoFi may receive a commission from the lender. This commission does not affect the amount you pay. We are transparent about our role and our earnings, in line with FCA regulations. You can read more about the responsibilities of credit brokers on the Financial Conduct Authority website.