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The A-Z of Used Car Finance

April 27, 2016

Whether your dream car is new or second hand, buying a car can be an expensive ordeal. Thankfully, buying a car on finance is an affordable alternative to forking out on an up-front payment – and if you opt for a used model, you can save a bundle on your monthly repayments too.

If a pre-loved car has caught your eye and you’re wondering what your options are when it comes to securing finance, you’re in luck! Today, we’re taking a closer look at the benefits of a used car loan – and giving you all the information you’ll need to get your hands on a good deal.

A-Z of used car finance

Why buy second hand cars on finance?

While buying a brand new car may alleviate your concerns surrounding the vehicle’s history and any fast-approaching repairs, natural depreciation means your shiny new motor will begin losing value from the moment you get the keys. You’ll invariably find that second hand cars prove cheaper, without having to compromise on the vehicle’s condition – as some used cars have only had one previous owner for a short amount of time.

With no deposit required and no early settlement penalties, buying a used car on finance can offer a cost-effective alternative to getting a loan for a mint condition model. At The Car Loan Warehouse, we offer flexible terms and competitive rates on loans from 2-5 years – and if you decide that a Personal Contract Purchase is the route for you, you could even benefit from lower monthly payments on the model you want (although there will be a final balloon payment to pay at the end of your agreement). Put simply, buying a used car on finance means less to pay each month without having to settle for second best.

When you apply for a finance deal, there’s also no need to worry that the model you have your eye on will be gone by next week – buying used cars on finance means that, within 60 minutes, you could be able to drive off the forecourt in your very own motor. With The Car Loan Warehouse, there aren’t even any restrictions on where you buy – with loans available on cars bought through any dealer or private seller.

Finding the best used car finance deals

Buying a used car presents a few risks – not least the possibility that you could be roped into an unfair deal. Buy with confidence with The Car Loan Warehouse, thanks to our free suggestion and sourcing service. Our specialists check to ensure that each vehicle is being sold by a legitimate dealer, and provide a full HPI check to confirm that there’s no outstanding finance secured against the vehicle.

Our finance options give you the freedom and flexibility to find a deal that suits your circumstances. While buying privately often can lead to extra savings, we always recommend that our customers conduct thorough research and inspections of the vehicle to be sure that everything’s up to scratch.

A full exterior and interior inspection is a must when buying any second hand car. Check the paintwork is intact, as bubbles will indicate rust. Tyres should meet legal requirements and a spare tyre should come as part of the package. Ensure that the mileage on the speedo matches the advert and service history – and always take a look under the bonnet prior to taking a test drive.

Thoroughly inspect the paperwork before committing to anything, check in the V5 logbook that the seller has a legal right to sell the car, and visit gov.uk to find the vehicle’s MOT history.

used car finance

Bad credit car finance

Factors such as the repayment period and amount you’d like to borrow directly affect the size of your monthly payments. With options to borrow anything between £3000 to £50,000, a car loan can be used entirely to purchase the car, or to pay off a remaining balance for the car.

Car finance calculators are a quick and easy way to find a manageable monthly repayment plan – although spreading your monthly payments too thinly will increase the amount you pay overall. This handy online estimate varies depending on how much you’re looking to borrow, your current credit score and how long you’d like to repay your loan.

The APR is the amount of interest that you will be charged for the total loan amount, and will be paid annually as a part of your repayment plan. A car finance calculator can also give you an estimate on the APR you can expect to pay – and this percentage can vary depending on any up-front fees requested by your lender as well as your credit rating, meaning lower risk applicants will have a lower ‘Representative APR’ (and therefore less to pay in the long term).

If you’re convinced a used car finance deal is the route for you, try out our used car finance calculator for a personalised online quote – and find out how much you could borrow, and what you’ll need to repay per month.

Ready to buy the used car of your dreams? Give our friendly finance advisors a call on 0800 066 2888 to talk through your options, or apply online for second hand car finance with The Car Loan Warehouse.

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About The Author

Jon Le Roux is co-founder and company director of The Car Loan Warehouse. Being a mad engineering and motorsport enthusiast, I spend more hours than is healthy, watching, reading or talking about cars, boats, motorbikes…..basically anything with an engine.