Our Guide To Finding The Best Car Finance Rates


When it comes to car finance, it is only natural to want the best, cost-effective option for your needs. However, knowing where to start and trying to navigate the various options can be overwhelming. We have put together this guide to help you find the best car finance rates for your needs, highlighting which aspects to look for and things to consider. Hopefully, it will help you to find what you are looking for, whether that is car finance as a first time driver or car finance for bad credit.

What Do I Need To Consider When Searching For Car Finance?

When browsing for the best finance rates, it is crucial to shop around. Take your time to do some comparison work and read reviews to see which options could work best. During your research, there are a few features that you need to keep in mind:

  • Eligibility – check whether you meet the eligibility criteria to avoid potential disappointment.
  • Term – consider how long you need to borrow the money for and what term options are offered by the lenders you are looking at.
  • Interest – interest rates are usually offered based on your credit rating and how long you want to borrow for. Different finance companies will offer different rates.
  • Fees – when you think that you have found the best rates, you will need to check the fine print. Some finance companies can charge exit or late repayment fees.

What Are The Different Types Of Car Finance?

There are several different types of car finance available, including:

  • Hire purchase (HP) – this option involves an upfront deposit, then paying fixed monthly instalments of the car finance, plus interest. After the final payment is made, you will have paid the full value of the car and will own the vehicle.
  • Personal contract purchase (PCP) – this option also involves an initial deposit and fixed repayments each month. However, at the end of the term, you can either keep the car by making a ‘balloon’ payment (a final lump sum to purchase the car), trade it in for an upgrade, or return it to the dealer.
  • Personal leasing – this is also known as contract hire and is similar to PCP. The main difference with this type of finance is that you will not own the car yourself, but rather you will be renting the car for a set period with an agreed annual mileage.

How Do You Find The Best Car Finance Rates?

If you have determined that car finance is the right course of action for your situation, you will need to find the best rates to avoid repaying too much. Here are a few tips to help you:

  1. Check your credit score and see if you can improve it – the higher your credit score is, the better chance you have of securing cheaper rates on finance.
  2. Do not apply with multiple providers at once – each time you apply, a check can be carried out on your credit rating, which leaves a mark. One rejected application should not cause too much damage, but lots of applications in a short space of time could be detrimental.
  3. Do not be afraid to ask questions – lenders that have your best interests at heart should answer any questions you have about their rates.
  4. Look at the APR, the repayment period, the fixed or variable rate, and the application time.

There are many comparison sites available that can help too, and will take out all of the guesswork that comes along with searching for finance. Not all providers will be listed here but it should give you a good idea of what is potentially on offer to you for your circumstances.