Car Finance – How Does It Work?
If you’ve never had a car on finance before, you may be wondering how does car finance work? Whether you’re looking to finance a car through hire purchase, PCP or a personal loan, there may be different options available to you. Using a car finance broker like us also makes the process quick and easy. Our guide below explains how car finance works with Refused Car Finance and how it can benefit you.
What is Car Finance?
So, car finance – how does it work? Used car finance is a simple and affordable way to spread the cost of your next vehicle into manageable monthly payments. The term “car finance” covers several types of finance agreements, each suited to different needs and circumstances. In essence, car finance allows you to borrow money to fund your car purchase and repay it over an agreed period with added interest. This means you can enjoy driving a better car than you might be able to afford with cash alone — all while keeping payments within your budget.
When you take out car finance, you borrow money from a bank or lender and agree to repay it over a fixed term. Your monthly payments include interest, and it’s important to ensure you can comfortably afford each one. At the end of your agreement, you’ll have different options depending on the type of car finance you choose. These may include taking full ownership of the car once all payments are made, paying a final balloon payment to keep the vehicle, or returning the car to the dealer.
How Does Financing a Car Work?
If you’re wondering how does car finance work at Refused Car Finance, we’ve broken the process down in 3 simple steps:
1. Tell Us About You.
Just fill out our quick, free application form—it takes only a few minutes and doesn’t impact your credit score.
2. Let Us Do The Leg Work For You.
Your personal finance expert will contact you to help find the best finance package from some of the UK’s most trusted lenders.
3. Enjoy Your New Car.
After picking the right finance deal, you can get any car that fits your budget from a trusted FCA dealer anywhere in the UK—it really is that easy!
How Does Refused Car Finance Work?
We are a UK-based car finance broker specialising in helping people with low or bad credit scores. Our mission is to provide car finance to those who may struggle to get approved elsewhere.
As one of the leading bad credit brokers, we focus on affordability and income rather than just your credit history. By working with a large panel of lenders offering multiple tiers of finance, we can find the most suitable car finance deal for your personal circumstances. While no one can promise guaranteed car finance, we get pretty close!
Once you apply online for a free, no-obligation quote, a dedicated customer contact agent will reach out to review a few details and help secure the best finance deal for you. After approval and acceptance from one of our lenders, you can move on to the fun part—choosing your new car!
At Refused Car Finance, we handle all the paperwork and manage the process on your behalf, so there’s no hassle for you. From submitting your application to receiving approval can take as little as 24 hours, meaning you could be driving your next car within the week!
Car Finance Options Explained:
There are a number of car finance agreements that tend to be the most popular in the UK, but we specialise in providing affordable hire purchase and personal contract purchase deals. Your car finance options explained are below:
How Does HP Car Finance Work?
Hire purchase is a straightforward form of car finance that allows you to spread the cost of owning your next car. You make monthly payments to pay off the value of your chosen car until the end of the agreed term. The lender owns the vehicle throughout the agreement but once the final payment has been made, you then become the legal owner of the car. Hire purchase car finance customers can benefit from affordable, fixed payments, flexible repayment terms, fixed interest rates and no mileage limitations.
Find out more about HP finance.
How Does PCP Car Finance Work?
PCP is a form of Hire Purchase but unlike HP, you don’t spread the full cost of your chosen car. Instead, you make monthly payments with added interest to cover part of the cost. This means at the end of the agreement you have more options. You can choose to hand the car back to the dealer, pay the balloon payment and keep the car or use the value towards a new car on a new agreement. We can also help if you are looking to refinance a balloon payment. Personal Contract Purchase agreements are good for people who want low monthly payments, more flexibility from their car finance deal and flexible loan terms.
Find out more about PCP deals.
Let Us Help You Finance Your Next Car!
☑️ Get a quote with no credit impact.
☑️ Simple, speedy process.
☑️ Get an instant decision online.
☑️ Enjoy secure, fixed-rate payments.