Compare Car Finance

  • Compare Unsecured Personal Loans and Hire Purchase products, all in one place using our easy online comparison powered by Motiv Finance
  • Find the Car Finance deals you qualify for, with no impact on your credit score
  • Quick, simple form – see your results in just a few minutes
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This car finance eligibility service is provided by Motiv Finance.

When you click Check my eligibility, you will be directed to Motiv who will help you find personalised finance deals. The data you supply will be directly submitted to Motiv and be used to generate loan quotes from Motiv's panel of lenders.

By using the car finance eligibility service you are agreeing to Motiv’s terms and conditions and privacy policy which can be found at Motiv's service only uses "soft searches" meaning there will be no impact on your credit score. Motiv is a trading name of Motiv Finance Limited and is registered at 6 Worcester Close, Lowdham, Nottingham, NG14 7WH and is authorised and regulated by the Financial Conduct Authority

Published on 05 July 2017. Last updated on 30 April 2021.

How to choose car finance

Cars are essential for many people to get around day-to-day, but they are a major expense. Whether you are buying your first car or replacing your old car, you need to have a plan of how to pay for it. Ideally, individuals would have enough in their savings to purchase a vehicle outright, but this is not always the case.

For those who can't pay for their chosen vehicle upfront, car finance is an alternative way to help them get the car they want. However, because there are several car finance products available, it can get confusing trying to understand the differences between them and the benefits of each one. What is suitable for one customer may not be appropriate for another, as the best car finance option for you will depend on your credit history and your personal circumstances, as well as the car you plan to buy.

Types of car finance

Personal loan

Personal loans are unsecured, which means they are not guaranteed by any asset. They are a flexible way of purchasing a car as the lender will transfer the money to your account, which you can use to buy your car and own it outright from day one. You will then repay the loan via monthly repayments. The personal loan amount you can apply for, and the interest rates you can receive, will depend on your income, your credit history, and other factors.

Because the loan is not secured against your vehicle, if you fail to make the repayments then the lender can't repossess it.

Hire Purchase

A Hire Purchase agreement is a type of finance that is secured against the car that you buy. Because the finance provider has the car as security, customers may find they can get cheaper interest rates from Hire Purchase rather than a personal loan, especially if they have a poor credit history. For the period of the agreement, the finance provider will own the car, although you will be its registered keeper. At the end of the agreement, you can pay an “option-to-purchase” fee to become the full owner of the car.

A Conditional Sale agreement is similar to Hire Purchase, but rather than paying an additional charge to become the full owner of a vehicle, an individual with a Conditional Sale agreement will automatically become the owner of the car after making the final repayment.

Personal Contract Purchase (PCP)

PCP finance has grown in popularity in recent years. Through this form of car finance, customers won't be paying for the full value of the car; instead they will only make repayments for the difference between the car's current value and the projected depreciated value of the car at the end of the agreed period. This means the monthly repayments tend to be lower than the other car finance options, which could enable people to drive a newer, more expensive car.

However, you may have to pay more interest for a PCP agreement, and you won't automatically own the car at the end of the contract. PCP does give you the opportunity to keep the car at the end of the agreement, but you will have to make a final “balloon payment” to do so. This payment is normally quite substantial as it is based on the car's current value that you haven't yet paid for- known as its Guaranteed Minimum Future Value (GMFV). Most PCP customers will return the car at the end of the agreement.

Again, as with Hire Purchase, the finance is secured against the value of the car, so failure to make the repayments means the lender could repossess the vehicle.

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