Understanding Car Finance

Finance Types

Hire Purchase (HP) finance

Hire Purchase (HP) finance is by far the most popular finance deal for car buyers. Our HP deals vary in size and repayment terms, and paying a deposit is optional – with deposits generally starting from around 10%. Once the final payment is made on your HP loan, you will own the vehicle outright.

This type of car finance agreement combines elements of a car loan and lease – but unlike PCP and car leasing, the car’s residual value will not be taken into account. With Hire Purchase car finance, the size of your monthly payments is calculated based on the length of your repayment plan, the deposit paid and the car’s retail price.

Unsecured car finance

Unlike many lenders, at The Car Loan Warehouse, we offer unsecured car finance deals. This form of finance is best suited to customers who want to buy their car from a private seller, as there are no restrictions on how you spend your loan. With these loans not being secured against any assets, interest rates can often be higher – but this is the perfect finance solution for those who need help with their road tax or car insurance, as well as the car finance itself.

Other things to consider

Bad credit car finance

Applying for a loan through a car finance broker gives you access to a huge list of expert lenders with diverse sets of criteria. At The Car Loan Warehouse, we’re specialists in exploring the best car finance deals on the market – investigating a range of competitive deals to find car finance that suits you, regardless of your situation.

From CCJs and a history of being refused car finance to late payments and even bankruptcy, whatever it is that’s holding you back from finding finance for your new set of wheels, we can help. At The Car Loan Warehouse, we’re more interested in the present than your financial past – so as long as you can afford the repayments, we should be able to find a suitable car finance deal for you.

VAT

Understanding VAT can be confusing when it comes to buying a car, but here’s what you need to know: if you’re buying new, VAT must be paid to Customs & Excise by the dealer. Once paid, the vehicle is deemed to be ‘VAT Qualifying’ – and this may be claimed back if you’re VAT registered. When a ‘VAT Qualifying’ vehicle is sold, as a VAT registered seller, you must charge VAT on top of the sale price and return this to Customs & Excise. If you don’t claim back the VAT, the vehicle becomes ‘Non VAT Qualifying’, or a ‘Margin Vehicle’, and cannot attract VAT in the future.