Car Finance

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Secure a Great Car Finance Deal – and Save
on Your Next Car – by Comparing the
UK’s Most Trusted Lenders.

Nissan Qashqai

Secure a Great Car Finance Deal – and Save
on Your Next Car – by Comparing the
UK’s Most Trusted Lenders.

We’re rated Excellent Trustpilot
4.9 out of 5 on Reviews 1774
“ChooseMyCar is Ranked #1 out of 102 companies in the section Car Finance and Loan Companies with 884* 5 Star Reviews”
*as of August 2021

Finance Calculator: How Much Can You Afford to Spend On A Car?


4 Years

48 monthly repayments

Best available rate 6.9%

Total cost of credit £1,140.16

Total repayment £9,140.16

Get a quote No impact on your credit score

Representative example:

Borrowing £6,500 over 48 months with a representative APR of 21.4%, an annual interest rate of 21.4% (Fixed) and a deposit of £0.00, the amount payable would be £196.24 per month, with a total cost of credit of £2,919.52 and a total amount payable of £9,419.52

What Is Car Finance?

Car Finance allows you to spread the cost of buying or using a car, making ownership more affordable. Splitting payments into monthly chunks allows you to fit your purchase into your monthly outgoings, putting you behind the wheel in an affordable, simple way.

More than 91% of owners finance their car purchase every year, making it the most popular way to buy or use a car.

There are a number of Car Finance Options available, from Hire Purchase to PCP. Each has their own advantages.

Car Dealerships often work as Brokers for Car Finance Providers, who take on the business of arranging and administering finance on their behalf. Dealerships may work with more than one Finance Provider to match the needs of their customers.

How Does Car Finance Work?

There are usually three parties in a Car Finance deal: You, the Retailer and the Finance Provider.

You pay a deposit (no deposit options available) or part exchange your last car. Sign a Credit Agreement. Pick up and use the car for an agreed period of time. Make monthly payments to cover this use/pay the finance in full.

The Retailer (usually a Car Dealership): Sells the car to you. Invoices the Finance Provider. Is paid by the Finance Provider for the agreed cost of the car.

The Finance Provider: Pays the Retailer for the car and takes ownership of it. Takes Monthly payments from you for the use of the car until the end of your repayment “Term”.

The amount you pay to the Finance Provider every month will include interest payments and fees – often referred to as the “cost of borrowing”. These costs cover the administration and profit for the Finance Provider.

The amount you pay in Interest and Fees (the “APR”) varies by customer and provider. Buyers with better Credit Scores, for example, might pay less APR. This can also change according to Bank of England Interest Rates.

How Can I Secure the Best Car Finance Deal on the vehicle I want?

There’s never been a better time to buy a new or used car: there are hundreds of thousands of brilliant new and pre-loved cars out there just waiting for a new driver to put them on the road.

You could be that driver.

Buying the car you need at a price you can afford means getting the Very Best Deal on your Car Finance.

Top Car Buying Tips from’s Experts

How to Choose your car wisely?

First up: choose your car. The type, age and manufacturer of a car will all impact how lenders calculate the cost to you. Some cars depreciate more, some less. Popular cars mean more choice and lower up-front prices.

More importantly; choose the car that is going to suit your needs now and in the future – size, ownership cost, extras and essentials. You’re going to be paying monthly for a few years at least so make sure you choose a car you’ll love as much tomorrow as you do today. Read our Quick Car Guides to Help You Choose Your Next Car.

How to buy from a Reputable Dealership?

Lenders are always more comfortable when they trust the dealership you’re buying your car from. Fewer headaches mean lower risks for them and a better deal for you.

It also means more peace of mind if something goes wrong, with warranties and returns available. Read our Guide to Reputable Dealerships to learn more.

How do I compare quotes from a panel of lenders to secure the very best deal?

Your first quote might sound like a brilliant deal… but is it the best deal? You’ll never know if you don’t ask other lenders. Individual lenders have different ways to assess you and your credit history, and different systems to calculate the finance they’re going to offer.

We work with the UKs most trusted Car Finance Lenders and compare their offers to get you the best deal.

Who are Our Lenders and What do you Need to Remember when Applying to Them?

What are my Car Finance Consumer Rights?

Knowing your rights puts more power in your hands: power to know when you can negotiate fees, power to challenge any fees a dealership may add to your finance and the power to ensure you’re protected, whatever happens. Read our handy know Your Rights Guide.

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Best Used Car Finance Deals

We've put together a handy table to let you see, at a glance, which finance option is the best one for you.

Hire Purchase Personal Contract Purchase Personal Loan
Requires initial deposit Usually requires deposit Usually requires deposit
You own the car outright
Car is yours at the end of the agreement
Fixed monthly payments
Optional baloon (final payment)
Excess mileage charges
Secured against an asset (eg. car)

What are the different types of used car finance available?

Used car finance comes in a number of different forms; you’ve more than one option. While it may feel like these are endless, and even a little daunting, there’s actually less than you’d think. HP. PCP. PCH. So what do they all mean? And which one is the right one for you?

Hire Purchase
What Is It and What Makes it Different?

Hire Purchase is the simplest form of finance – a loan linked to, and/or secured upon, the value of the car you’re buying. Your Finance Term and Repayments are both Fixed, so you always know what you’ll be paying.

Hire Purchase

What’s the Process Like?

  1. Pay a deposit or part exchange your old car, to act as your deposit – or a bit of both. The bigger your deposit, the lower your monthly repayments.
  2. Make repayments every month for between 3 and 5 years (depending on your Hire Purchase Agreement) until the value of the car, and your finance, has been covered in full.
  3. Pay a small “Option To Purchase” fee to buy the title deeds for the car. You can refuse to do this and hand the car back but we wouldn’t: you’ve already paid for the car in full, after all.

What Do I Need To Know?

Your Finance Provider owns the car until you’ve paid the final payment (that’s where the “Hire” bit comes in). No selling or modding your car before you’ve paid for it!

You’re not locked into servicing agreements or milage allowances. Your Finance Provider assumes you’ll be completing your Finance and driving away your car so your usage is your business.

You can pay off your finance early and buy the car before the end of your term bu there may be fees for doing this.

You can also end your agreement and hand the car back – just be sure that you’ve paid at least half of your total finance first. Do this and the car goes back to your Finance Provider.

Why Choose Hire Purchase?

Simplicity. It’s as straightforward and simple as car financing gets

What Is It and What Makes it Different?

Flexibility is the name of the game with a PCP agreement: when you reach the end of your finance term you can Hand The Car Back, Swap To a Newer Model or Pay a Balloon Payment to buy the car outright. No wonder it’s the UKs’ most popular form of Car Finance.


What’s the Process Like?

  1. Pay a deposit, part exchange your old car or do both. Remember: the more you pay in your deposit, the cheaper your monthly payments are likely to be.
  2. Agree your Mileage Allowance. This tells your Finance Provider how much your car is likely to wear and change the amount you pay every month.
  3. Your Finance Provider will then tell you how much they think the car will be worth at the end of the agreement. This is called Guaranteed Minimum Future Value (GMFV) or “Balloon Payment” and this is what you’ll need to pay at the end to keep the car.
  4. Review and Sign your Credit Agreement. This should detail all your payments, fees and responsibilities – read it carefully.
  5. Pay the agreed monthly fee for between 2 and four years, as negotiated and agreed in advance.
  6. At some point shortly before your Finance Term ends your Finance Provider will contact you to ask if you want to pay the GMFV (Balloon Payment) and drive away with the car after your Agreement has ended.
  7. You then have three options:
    • Pay the Balloon Payment and Keep the Car
    • Hand the car back. Be aware: extra fees may be charged for Excessive Wear and Tear or additional mileage use.
    • Exchange the car for an alternative vehicle through the same Finance Provider. If the car is worth more than the original GMFV then you can use this as an equity deposit.

What Do I Need To Know?

If you hand the car back:

  • If you drive more than Mileage Limit, you’ll be required to pay an extra amount for every mile you’ve exceeded it by.
  • If there are any dents, scuffs or any other damage that isn’t deemed “usual wear”, you’ll be charged for this too.

You are not guaranteed any equity in your car – car prices can go both up and down over time, after all.

You can terminate your agreement before your final payment but you’ll have to give the car back. To do this you must have paid off – or be prepared to pay off – half the total amount owed at the start of your agreement.

Why Choose A PCP Agreement?

Options! Don’t know if you want to buy, exchange or walk away at the end of your Finance?

Here’s your answer.
It’s also one of the cheapest ways of financing any vehicle.

Conditional Sale
What Is It and What Makes it Different?

Much like Hire Purchase, a Conditional Sale is one of the simplest ways of financing your car. Unlike Hire Purchase, however, you’re committed to buying the car from the moment you pay your deposit. There is no option to hand the car back and no “Option To Purchase” fee.

Conditional Sale

What’s the Process Like?

  1. Pay a deposit or trade in your old car for what it’s worth.
  2. Pay monthly for three to five years, depending on your finance arrangements and circumstances. Easy!

What Do I Need To Know?

No service commitments! Your Finance Provider won’t lock you into milage restrictions either. The car is yours once you pay it off so how you use it is a matter for you. Imagine that.

Like a Hire Purchase, the car remains the property of your Finance Provider until your last payment is made: you can’t sell it or give it away until it’s yours and yours alone.
You can terminate your agreement before your final payment is made but you’ll have to give the car back and you must have paid off – or be prepared to pay – half the total amount owed at the start of your agreement.

Why Choose A Conditional Sale Agreement?

If you are absolutely certain that you’ll be buying and keeping your new car, a Conditional Sale is one of the most straightforward ways to do it.

Personal Loan
What Is It and What Makes it Different?

A Personal Loan is different to other forms of Car Finance in that it’s arranged directly with a Finance Provider, Separate from the Dealership or Retailer. They are usually Unsecured.

Personal Loan

What’s the Process Like?

  1. Choose your Car.
  2. Apply for a Personal Loan from a Finance Provider – either a Car Finance Specialist, a Bank or another Lender. If accepted, you’ll fill in paperwork, money will be deposited directly into your bank account.
  3. You use that money to buy your chosen car.
  4. You repay the Loan over a period of time – usually between 3 and 5 years – plus interest and payments. This takes the form of a Monthly Payment.

What Do I Need To Know?

Unlike Hire Purchase, PCP or Conditional Sale, where the Finance Provider owns the car until your Finance is paid in full, you own the car straight away with a Personal Loan.
You can pay your Loan off early, if you have the funds. You may be charged an additional fee for this, however.
You can’t terminate your agreement and hand back your car, as you can with other Car Finance arrangements.
You can sell the car immediately and use that money however you wish however you must continue paying your Finance Provider every month until your Finance is paid in full.

Why Choose a Personal Loan?

If you want to own your car from the moment you drive it away, a Personal Loan is the way to go.

Frequently Asked Questions

A car is likely to be the second most expensive purchase you will make in your life. Over a tonne of metal, glass and wiring will always cost and we don’t always have the cash on hand to afford it. If you don’t have Thousands of Pounds saved up and available, Finance can be an extremely useful and responsible choice.

Young drivers and Students, for example, may not have enough ready cast to buy a car outright but there are Car Finance Options available for Students that could put them on the road. Likewise, a growing family with a good income might still struggle to save in today’s economy.

The constant increase in the price of cars, new and used, is also putting new pressure on family finances. Buying on Finance can level this playing field by softening the upfront cost and spreading the cost over time. With great options for affordable used cars on Finance, PCP, Hire Purchase and Lease options put tens of thousands of cars within reach of buyers across the UK.

Car Finance can make buying a vehicle more affordable in the short term by spreading the cost of the vehicle over time. This can help buyers to slot the purchase into their regular outgoings without spending months or years saving up for a vehicle. Circumstances can often change so quickly that buying outright is not always an option.

As with all big purchases, however, it is wise to ensure that you choose wisely. Car Finance comes with additional charges and interest payments (together called APR) which might make your car more expensive in the long run. It’s a good idea to use a car finance calculator to see just how much you could be spending overall. If your income or credit history aren’t as good as you’d like then these additional costs can go up, though there are plenty of options for Finance in these circumstances, even if you’re claiming benefits.

One area that’s becoming an increasing issue for Financing is Negative Equity. This is when the value of the car drops below the amount you’re paying back. This is less of a problem on the used market, however.

As with every major financial decision, it pays to shop around. Different lenders charge different rates and offer different benefits. This is especially true if you have a bad Credit Rating or you’ve been declined in the past.

The temptation is to go with the Finance offered by the Dealership. This is certainly a very simple choice but it’s not compulsory – you can apply to an independent Lender. You can also apply to your bank for Personal Loan Car Finance, which may bundle in benefits from your long association with them.

If you’ve had trouble with finances in the past, a specialist lender, like the ones we work with at ChooseMyCar, can often be the best option. Our specialists can also help you to choose the best value cars to buy on Finance, depending on your situation.

Can You Get Car Finance Online?

Yes, you can get cheap Car Finance Online – either directly or via a broker. While there is paperwork to fill in and evidence to present, all of this can now be arranged digitally in most cases.

Evidence can often be photocopied or photographed and paperwork can now be signed with a digital signature. It may still be that a phone call is required, especially if the arrangements are a little more complicated – with Self Employed Car Finance, for example. The rules over which evidence will secure your finance might need a call to understand.

Other Finance packages like Guarantor Loans or No Deposit Car Finance might also require a little more input. Overall, however, you needn’t have to set up a meeting face to face and most of the arrangements can now be made digitally.

Is It Dumb to Pay Cash for a Car?

Paying cash for a car does have a few advantages. Firstly, the fees and interest will be lower, if they exist at all. This will save you money overall. Secondly, you get to own and drive away with the car instantly, whereas you don’t own your car until all payments are made with Hire Purchase or PCP. You never own the car with a Lease.

If you’re too young to have built up savings to buy a car outright, however, cash may not be an option whereas Young Drivers Car Finance is a possibility.

Circumstances can also change very quickly. If you discover that you’re about to become a parent for the first time or you’ve just landed a new job that requires a flexible commute, saving up the money to buy a car with cash might not be realistic. This is where Finance can come in really handy. Even if you’ve a low Credit Score and don’t think it possible without boosting your Credit History, Finance options exist which could help you out.

This depends on the type of Finance you choose.

With Hire Purchase finance, you automatically become the sole owner of your car from the moment that your last payment is made. You can then sell it on or keep driving it without any further input from your Lender.
With PCP finance, however, owning the car at the end of your agreement is a choice you must consider. With PCP finance, you have three choices at the end of your Finance: upgrade to a new car, hand your car back or buy it by paying a lump sum. How much this lump sum (known as a Balloon Payment) is depends on the cost of your car and your initial down payment, so it’s worth carefully considering what car you can afford if you want to buy on a PCP.

With a Lease, you don’t get an opportunity to buy your car – it goes back to the Leasing company. The advantage of this is that your monthly payments, including APR, tend to be lower.

So long as they’re insured to do so, yes. The rules about other people driving your car are the same, whether you’ve purchased it through finance or paid in cash.

The most important consideration is what happens if something happens while they’re driving it. If it’s written off without the driver being insured to drive it, you will still have to pay the remaining finance. If the car is an expensive one, with a considerable GFV, you could be stuck with an expensive bill that your Lender will insist that you pay.

If the driver is insured then you’ll get much of that back. If the insurance includes GAP cover then you may get the full amount back. In either case, another insured person is allowed to drive your car.

The exact documentation you need to secure Car Finance from a Lender depends on the Lender you’re approaching. Generally, however, they ask for the following three things:

● Proof of identity.
● Evidence that you can afford the car.
● Your address history.

Proof of identity might be your driving license or birth certificate. Evidence of your ability to afford the repayments might include copies of payslips and a look at your Credit Score. Their required Credit Score will, again, depend on the Lender and your personal circumstances.

Your address history helps in checking your Credit History. Old bills or correspondence usually suffices. Establishing your Credit History and your Credit Score will then help them to assess your suitability for finance, especially if you’re looking for Low Rate Car Finance.

Car Finance terms can last anywhere between 2 and 5 years. The length of your finance is up to you. Choose your down payment, talk to your dealership about any Deposit Contributions, pick the number of years you’d like to pay and off you go.

Be aware, of course, that while a longer term might give you lower monthly payments, you could end up paying more overall. There’s also the question of Selling Your Car with Outstanding Finance, which you might want to do. 5 years is a very long time in car technology, especially when it comes to EVs. Check out our Car Finance Guides for more details.

Why ChooseMyCar Car Finance?

With deals from a wide range of lenders, ChooseMyCar is the perfect place to find car finance to suit your needs and circumstances.

  • No deposit finance available
  • Flexible repayments
  • Poor credit finance accepted
  • All circumstances considered
  • Easy online applications
  • Fast decision

What to consider before applying for Used Car Finance

  • You will need to go through a credit check.

  • Before applying for car finance you should make sure you have checked the affordability of your chosen option.

  • Once you’ve passed a credit check it’s still on you to make sure you have the money to make the monthly payments for the whole term of the loan.

  • You may also need to save for a deposit upfront in addition to the monthly payments.

  • Some types of car finance will come with mileage allowances and if you go over these you will be charged.

  • Maintenance doesn’t always fall on you but for those that it does, you’ll need to return your car in a good condition to make sure you avoid any additional charges.