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Car finance advice

Before you apply for car finance…

Our simple tips that you should follow before you sign your life away on that new or used car.

Most cars these days are bought on some sort of finance agreement – more than 90% of all private new car sales, and up to half of all private used car sales. That means millions of people in the UK are taking out some form of car finance every year.

But despite the popularity of financing a new or used car, what is still surprising is the lack of preparation that most people put into their car finance decisions. Given that you are taking on thousands of pounds of debt to purchase that vehicle, it is very important that you understand what you are doing and have some plans in place.

Here are a few simple tips that you should follow before you sign your life away on that new or used car.

Before you apply for car finance, you should... Oh. Too late.
Before you apply for car finance, you should… Oh. Too late.

Understand the types of car finance available to you

Most private buyers will purchase a car on a personal contract purchase (PCP). This article specifically explains how a PCP works. If you can claim VAT on your vehicle, then a lease (contract hire or operating lease) may be worth considering. There are also other types of car finance, like hire purchase, conditional sale and lease purchase.

Each type of finance is different – not just in terms of the monthly payments, but your consumer rights and the terms and conditions of what you need to do to fulfil your side of the contract. Make sure you understand the implications of each type of car finance before you commit to anything so you don’t get caught out later on.

Car manufacturers and dealers will usually push the PCP because it works out best for them, but make sure it is the right solution for your needs.

Many people talk about ‘leasing’ when they really mean a PCP because the products appear similar, which creates confusion. Your rights and responsibilities are quite different in a lease (like personal contract hire) and a purchase product (like a personal contract purchase)

Knowledge is power, so make sure you know what you need rather than taking what a dealer wants you to take.

Plan for tomorrow, today

Many people get carried away by headline monthly numbers in new car adverts, but you need to understand the overall cost of borrowing and the cashflow implications of different finance options.

For example, a PCP has low monthly payments but a potentially big sting in its tail, whereas a hire purchase has much higher monthly payments but more flexibility and simplicity, and usually costs less overall.

It also means that if you need to change your car before the end of the agreement, you will usually be in a much stronger position with HP finance than PCP finance. With hire purchase, you pay back more of your debt back every month, so your settlement at any point in the agreement will be less.

Many a young person has signed up for a two-seat sports car on a PCP over five years, with a small deposit, only to find that in 18 months’ time, they suddenly have an urgent need for a family estate… Usually, this means they are in a very poor financial position because they didn’t plan ahead (in more ways than one!).

In times of economic uncertainty, it’s even more important that you are not stretching yourself too far in order to buy the car you really want instead of the car you really need. If your circumstances change at any point over the next three to four years (eg – you may be made redundant or have unexpected medical/legal bills), you will need to find a way to keep making your monthly payments.

If you are stretched to your financial limits when times are good, you will quickly get into trouble if you hit a rough patch.

Check your credit score – even if you have a good credit history

Finance companies will check your credit history using one of a few credit agencies, such as Experian, Equifax or CallCredit. Your credit history is a complete record of the finance agreements you currently have and have had in the past, as well as applications for credit that you have made.

Your credit score is not as important as the credit agencies would have you believe, as it is calculated from incomplete information and several assumptions. The credit agencies don’t have any of your employment or salary records, or information about your personal circumstances and living costs. However, it is a reasonable starting point to understand your overall financial position, and it is important to study the details of your credit history.

Don’t assume that the information that they hold on you is 100% accurate. This is important, because it can get your application declined even if you have an impeccable credit score and credit history. I was declined for a simple credit card application (I was switching my credit card from Bank A to Bank B) because Experian had me listed at an address that didn’t actually exist.

Getting this sorted out was a complete pain in the rear (and for the record, the Experian employees were a bunch of complete muppets, acting with complete arrogance and taking zero accountability for the information they carried on me), but was necessary if I wanted to get credit for anything from a credit card to a mortgage.

Once Experian had sorted itself out, my credit score was suddenly ‘excellent’ and the bank that had originally declined me suddenly wanted to offer me more credit…

Read all the paperwork thoroughly

Now that you have taken the time to understand the type of finance you are applying for, make sure you take the time to read every quote, offer and contract you are given before committing yourself to anything.

Understand any and all fees involved, all the terms and conditions and your obligations. I cannot stress this enough – it is your responsibility to understand your financial obligations.

Make sure you are given finance quotations in writing.  It is an FCA requirement that an agent of a finance company (usually the business manager at the dealership) gives you a specific and complete quotation for the exact vehicle you are considering.  Simply saying “£X deposit and £Y per month” is not an acceptable form of quotation.

An FCA-compliant quotation will give you a complete breakdown of all fees and charges, interest, and most importantly, the total cost of borrowing.

Likewise, when you are actually being presented with a finance contract to sign, there are many pages of paperwork which you have the right – and the obligation – to read and understand. Again, FCA requirements mean that you have to be given documents called Pre-Contract Information and Adequate Explanations, which summarise exactly what you are agreeing to.

You have the right to take this information away and read it, although the dealer will absolutely hate that and try and “answer any questions to put your mind at ease” or something similar so that you will just sign the contract straight away. Don’t be pressured into making a hasty decision – take your time and read every page of every document.

Ask questions

Don’t feel embarrassed if you don’t understand some aspect of a car finance agreement. Our article at The Car Expert about how a PCP works has racked up nearly a million views in the last five years, and many other finance-related articles get just as many (or more) views each day. Plenty of people struggle to get their heads around the concept of a PCP, so you’re certainly not on your own!

Ask the business manager to explain anything you’re unsure of, as many times as it takes. Even if you do know what you’re talking about, asking questions is a good test of a sales executive or business manager to see how they answer you.

You should expect to be given full answers which precisely address your questions, rather than brushing your concerns aside or giving one-line responses.

Shop around

Many people assume that they can negotiate on the price of a car, but that the finance deal is fixed. However, virtually all car finance agreements have some scope for negotiation. If you know how much deposit you want to put down and how much you want to spend, the dealer can reduce the price of the car and/or the finance to suit your budget.

Being realistic is the key – just as a dealer has a limited margin to play with on a car, they have a limited scope to work with on interest rates. And you should compare the dealer’s finance offer with what you can get elsewhere, as your bank may be able to offer you a better deal to finance the car.

However, getting a quotation is different from getting approved. Don’t submit a formal finance application until you’re ready to buy, as it will affect your credit score and may reduce your ability to get finance approval.

Be honest

Making a false application is fraud, which is a serious criminal offence. Don’t lie on your finance application to try and help get your application approved, as it will probably be noticed and you will be declined and blacklisted by the finance company.

This happens fairly frequently, and both dealers and finance companies have little patience for people who lie about their status to try and get finance. Even if it’s not picked up immediately, it could well come back to bite you eventually.

Similarly, you have the right to see exactly what information the dealership is submitting to the finance company on your behalf.  If they try and tweak your information to make it more palatable, they are committing fraud and you don’t want to be associated with that.

This applies to any credit application – I once had a phone shop employee try and massage my residential history not long after I moved to London to try and ensure I would pass the approval process, so I immediately left and went elsewhere.

Taking out car finance doesn’t have to be a scary situation, but you will be better off by doing your homework first and understanding exactly what you are signing up to. Rush into it, and you will usually pay considerably for your haste. Good luck!

Here at The Car Expert, we are building commercial partnerships with companies who can offer you competitive PCP deals on either a new or used car (as well as other types of finance if you prefer). Check these out before signing any finance agreement with a car dealer:

  • We Finance Any Car can arrange PCP or HP finance at competitive rates
  • FairSquare can find and finance either a new or used car, and deliver it to your door

This article was originally published in April 2014 and was last updated in August 2019.

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Stuart Massonhttps://www.thecarexpert.co.uk/
Stuart is the Editorial Director of our suite of sites: The Car Expert, The Van Expert and The Truck Expert. Originally from Australia, Stuart has had a passion for cars and the automotive industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.


  1. Hi Stuart,
    Iam currently 15 months into a 4 year PCP agreement but have been looking for a new car due to expanding family, we have gone to a dealer who has told us we are in negative equity by around 1000.00. my partner and i have healthy savings however although the payments can be covered as well as the negative equity my husband was made redundant 2 months ago and wont be back in employment for another month will he still pass a credit check. He has great credit.

    Thank you

  2. Hi Stuart,

    I applied for finance through a car dealership and it was accepted but I didn’t go through with it. I then found another car I liked elsewhere and wanted to finance through the same lender at the previous dealership because it was a great interest rate. I contacted the dealership and asked if I could get the name of the lender/company I was accepted with, but they refused to tell me. Am I entitled to know the finance company I was accepted by?

    • I wouldn’t expect the dealership to be very helpful. You can argue that if they have submitted an application on your behalf that you have the right to know the name of the finance company they applied to, but they’ll probably keep ignoring you as long as possible.

      You can get a free credit report from various providers online, which should show you any credit applications. Probably a much easier way of finding out who it was. Of course, it’s possible that they never submitted a formal application in the first place.

  3. hi, I have existing finance on a car but am due to receive a payout due to a works injury, is it best to pay off the existing loan or use the money for a pcp deal, I can get 35% discount as I can get a works made vehicle.

    • Hi Paul. We can’t advise you on how you should spend your money; all we can do is explain how different financial products work so that you can make an informed decision that suits your circumstances.

  4. Hi Stuart
    I paid a £400 deposit on a new Audi – no order form has been signed just simply deposit paid
    This was late on Friday eve . However, I no longer want the car as I feel not all info was provided by them and felt a little pressured into paying deposit as manager said the deal won’t be valid by sat morning if I didn’t accept. My question is can I get my deposit back ?

  5. Hi Stuart
    I applied for car finance and was declined because i had an unarranged overdraft usage 6 months ago before my finances became stable. How long should i wait until i try again?

    • Hi Faye. Impossible to say, because that will only be one of the factors that a finance company considers in any application. On this occasion, that may have been the ultimate reason your application was declined, but there would have been other factors as well (employment and residential history, estimation of affordability, other borrowings or financial commitments, etc) taken into consideration.

      In terms of your next application, a finance company will again consider a number of factors based on the information you provide at the time you apply and the loan you are applying for. To properly assess the likelihood of being approved or to assist in helping you improve your creditworthiness, you would need to speak to a financial advisor.

  6. Hi Stuart

    Had few agreements with Audi in the past , all paid off.
    Have HP which will be paid off in two months no missed payments. Two credit cards and bank overdraft ( 0 balance ) no missed payments.

    Mobile contract and utilities with payments on time and no missed payments.
    Only one CCJ £640 satisfied 4years ago and due to come off in 8 months. If I apply for Audi PCP now what are my chances for approval with this old CCJ!


    • Hi Mohanned. The CCJ will be a negative factor in the finance company’s assessment of your application, but not necessarily a prohibitive one. The finance company will be looking at stability of home/work history and income as their first priorities, and then any problems with previous finance agreements. If everything else is OK, and you’re not trying to borrow more than you can reasonably afford to repay, then it probably wouldn’t be a deal-breaker.

      A finance manager at an Audi dealer should be able to give you more detail about how the finance company is likely to view your situation, as they are submitting applications to the finance company every day. Every finance company has its own criteria, and it’s impossible to answer how one company would view an overall application based on one old CCJ from several years ago.

  7. Hi Stuart. I have a perfect credit score 999, but I don’t use enough credit according to experian, so I have been deliberately using my credit card to pay for things then pay it off after a week or two. I’m looking to take a car on pcp, I’ve been at my current job for 9 years and I’m just about to change jobs in to a higher role and more pay. What would you suggest is the best way, to apply now whilst still employed by the old company or wait until my new contract starts with the higher paid job. What will work better toward the finance?

    • Hi Cheree. If you have a good credit score and a stable home/work history, it probably won’t make an enormous difference in terms of your application – unless your new job is going to pay a lot more than your current job and you are wanting to buy a car you probably couldn’t afford on your current salary. You mentioned “contract” – if you are switching from a permanent role to a short-term contract (ie – shorter than the car finance contract), then that may be a potentially negative factor in their assessment.

      If you would prefer to wait until you have changed jobs, it’s often better to wait another few months so that you have records of a few pay packets if they ask to see evidence of your new salary.

  8. Hi Stuart. My partner has just entered in to a zero deposit pcp agreement, signed the finance at home, and emailed it over. She asked for my name on the log book too. We have now decided we cant afford it so cancelled 2 days later. The dealer is now asking for £700 in costs to cancel the agreement. We have refused delivery of the car and they told us they will just leave it outside their building. What can I do?

    • Hi John. If you have cancelled the finance agreement but signed the vehicle order, then you’ve still bought the car but now have no finance in place to pay for it. The dealership is right to be highly annoyed with you.

      You can hold firm and refuse to pay them any more money, and there’s not a lot the dealer can practically do except keep whatever deposit you’ve already paid – unless they want to take you to court. That will cost them money with no guarantee of winning, and even if they do win, there’s no guarantee that they will recover all their costs. They are unlikely to go away quietly, however, so you can expect a fight of some sort.

  9. Hi Stuart

    I am the Director of my own Ltd company, with a decent t/o of £120k. I have only been running my company since March 2017 so I don’t have company accounts etc.

    I have previously been permanently employed full time for the last 16 years… I am concerned that my self-employed status will affect my PCP application.

    I have already paid £1000 deposit with the dealer. Any thoughts?

    Thanks in advance

    • Hi Sam. The finance company may ask for additional information to back up any claims of income or turnover. Of course, that is probably difficult if you have only been operating for four months.

      It is true that self-employed status makes it more difficult to get finance approval, largely due to the difficulty for the finance company in verifying your declared income. However, they will be looking at many factors in addition to this, so overall you may still be OK.

      If your finance application is rejected, you should get your £1,000 deposit back without any hassles.

  10. Hi I applied for car finance with a dealer and was told over the phone my application has been accepted.
    I have to go in to hand in my document, sign agreements and register the car. Can my application be refused or rejected after being accepted when the lender pays the dealer ?

    • Hi Sarah. As long as your application was accurate and truthful, there’s no reason why you should be refused finance once the finance company has your formal contract.

  11. Hi there, I am looking for a new van for work. My credit rating is poor. Is it easier to get credit with a leaseas opposed to hp?

    • Hi Marc. It depends on the nature of your poor credit, but it probably won’t make an enormous difference.

      For more information about all things related to vans and commercial vehicles, visit our sister site The Van Expert.

  12. Hi have ordered a brand new vehicle on pcp the salesman said it had all gone through and proceeded to order the vehicle and i placed a deposit of £1000 he said the vehicle would be ready next week… Do you think the finance was approved straight away at the dealership? Does this normally happen or does it have to go to someone else to approve it VW dealership uk

    • Hi Darren. The dealer does not approve or reject the finance application; that would be done by the finance company (in this case, probably Volkswagen Financial Services in Milton Keynes). Depending on your financial situation, that may have happened on the spot when the application was submitted.

      The dealer would have been in touch if the finance had been rejected, so it’s very likely that it was approved without any problems. You should be able to contact the finance manager and ask if it has been approved.

  13. Hiya I’ve ordered a brand new car from a dealer and have already paid separately the GAP insurance and will be PCP finance agreement over 4 years. I’ve been told the car will be ready to collect next week whereby I then go along and choose my number plate etc but just unsure if my application for finance has been approved. I’m assuming the dealer would of done a credit check at time of ordering ??? I’m guessing I’ll sign the finance agreement at time of taking delivery of the car ?? Surely they wouldn’t of ordered or gone any further if finance wasn’t already approved??

    • If your finance application had been declined, I’m sure the dealership would have been in touch to try and make alternative arrangements. You can always ring the business manager to ask about the application to get confirmation. When you go in to sign the DVLA number plate forms, they will probably want to sign the finance agreement at the same time – they don’t usually want to leave this until you are going in to collect the vehicle, as they will have to wait for the finance company to pay the dealership before they release the car (which can take hours or even a day at busy periods).

  14. Hi there i am considering car finance on 11,000 my credit score is 800 but I do have defaults on my score due to phone bills although balances are all settled and I have no recent missed payments, I also have started my new full time job in the last week although it was only 2 weeks ago I left my other job which was part time there has been about a 2 month gap in my employment within the past 3 years, what do you think of my chances of being accepted as the car is 3 hour drive from where I am based would be nice for some feedback.

    • Hi Sophie. It’s impossible to say; every finance company will look at the application and assess each aspect of it differently. Some things to consider:
      – How much deposit do you have? If you have no deposit (or very little), finance companies get nervous as it implies you are unable to save anything. A decent deposit (at least 10%) will always help an application.
      – You don’t have a regular salary history from your new job yet, having only started a fortnight ago. This is also a bit of a red flag for finance companies, as most new employees will have a probationary period in a new job, so you could be turfed out at any time for any reason. Often the finance company will want to see at least three months with your current employer, however it can also depend on your employment history – if you have had half a dozen jobs in the last two years, that doesn’t help.
      – Your phone bill defaults may be taken into consideration, but it will depend how old they are and if there were multiple defaults for large amounts of money.
      If you are not confident, you may be better off putting off your car buying for a few months. There will always be more cars.

  15. Exactly my thoughts, It’s possible to get some sort of note or letter from my boss proving that I do get regular payments just not through the bank, as well as getting someone in my family as a guarantor of needed

  16. Hi, I’m just here to ask for some guesses. I went into my local ford dealer today and put down a deposit for a car that is coming into the dealer in the next few days which I will therefore put the remainder of the deposit down if the car is in condition I like. It’s a 64 plate red edition fiesta. I’m just worried that I won’t get accepted for the finance, I have worked out all the payments etc and I can say that I can easily afford what I’m going for however, the job I’m in at the moment is cash in hand because I chose to have it like that,and I’m also in college getting money for that. A lot of the money for the car is my savings which have not been regularly transferring into the bank which I’m worried about just in case they don’t give me the finance,can you help?

    • Another thing is I don’t really have much of a credit history/score. Not because I can’t afford anything it’s just I’ve never seen the use in using one. I’ve heard that this can be seen as a good thing as well as bad?

    • Hi Josh. If your finance application is rejected, you should get your deposit back without any hassle.

      There are several things the finance company will be looking at with any application, such as; your credit history and score, your income and expenses, and whether they can easily identify you. Having a large deposit available certainly helps, but it is impossible to say how they will view your overall application.

    • Thanks for the reply Stuart. I know I can get the deposit back etc, but I’m only worried about if they look into my bank account. As for the past few months I chose the option to get paid cash in hand with my work instead of through the bank. I’m worried that they will look at the lack of income coming in through my account and say I can’t afford the repayments, when in reality..I can,I’ve just chosen to save my money in cash each payment. Will I be able to inform them that I will be getting the correct income for the repayments?

    • It is a question of whether they believe you, and how legitimate they see your cash-in-hand income to be. If you have a payslip and visible deposits from a recognised employer each month, it’s a lot better.

  17. Hi, I purchased a used car with HP over a four-year contract. Two years into the contract the car has given major and costly mechanical problems that were not my fault and unforeseen. I have lost confidence in the car and am contemplating changing but how would all this work with my HP agreement?


    • Hi Joe. To sell the car, you will need to settle your finance agreement, either by paying them the amount owed or part-exchanging the car – in which case, the dealer will settle the finance as part of the deal on your next car. Whether the mechanical issues were your fault or not is irrelevant.

  18. Quick question, I want to get pcp on a 14 plate Clio which is valued less than £10K and I’d like to take it out pretty soon. But I’ve just bought a house so now have a mortgage will this affect my chances of being accepted for finance of the car?

    • Hi Chelsea. As part of your application, the finance company will look at how much you are earning and how much your financial commitments are each month. If they are happy that you are not overstretching yourself, if shouldn’t be a problem.

  19. Hello Seval, A score of 439/700 on Clear Score is not to bad a score really. Clear Score base their scores on the Experian figures. Your score on Experian would not to bad really!

  20. Hi I have been approved for the finance but haven’t signed anything or left deposit yet am I tied to it and have to go ahead with it?

    • Hi Mary. If you haven’t signed a finance contract, then you are not locked into a finance agreement – you have simply been approved if you want to take out a finance agreement on the specific terms in your application. If you haven’t signed a vehicle order form or paid a deposit on a vehicle, then you are not committed to buying anything.

  21. Hi my daughter has just turned 18 and is wanting to take out a PCP on a new car. She has been working part-time for two years+ with wages paid into her bank account and is now in a full time job earning a salary of 17,200 PA. She has credit on her current car insurance so is already building something into her credit history.

    What do you think the chances are of her being accepted for PCP?

    • Hi Lisa. It’s difficult for young people to get car finance, even with two years’ part-time income history.

      To improve her chances, she should be keeping her financial aims modest and borrowing the smallest amount possible. One of the key considerations for finance companies is affordability, and if her monthly car payments are relatively high for her current income, they will almost certainly decline her. Also bear in mind that they will be wanting to estimate the risk over the next 3-4 years; her income will probably increase in that time, but her expenses may well increase by even more (moving out of home, going to university, travelling, all the usual things that 18-year-olds do), potentially leaving her with less disposable income than she has now.

      Some finance companies may only consider her if she has a guarantor (eg – you!); this would ultimately make the guarantor responsible for the payments if she was to ever default.

  22. Hi Stuart,
    I want to get a PCP finance and am looking to borrow around £20,000. I checked my credit on clear score and it say 439 out of 700. Do you think this would be good enough?

    • Hi Seval. Credit score is one factor, but the finance company will consider other factors when making a decision. However, 439 out of 700 does seem somewhat low, so it may be difficult for you.

  23. hi iv just paid deposit for car on finance
    would i more likely to be accepted to get finance on the car even my credit state ok
    or dose it dont matter.
    kind regard timothy

    • Hi Timothy. Your credit rating is an important consideration when the finance company is assessing your application. They will also look at the amount you are applying to borrow and your income to decide whether you are able to comfortably afford the repayments.

  24. I’m just about to spend £45k on a Volvo but can you tell me when the credit check is carried out for finance? Is it at the start when the car is ordered/deposit paid or is it nearer the time of delivery of the new vehicle (two months later)?

    • Hi Tony. There are no hard and fast rules on employment requirements when applying for car finance. In essence, the finance company will want to see a history of continued income at a level which shows you can afford the car and are likely to be able to continue to do so for the duration of the agreement. Usually you will have to demonstrate three years of employment (or self-employment) history – potentially more if there are gaps or lots of changes in circumstance.

  25. It’s a franchised dealer. I have thought of contacting the head office but wanted to know what position the finance company play in all of this first. Thank you for your help.

    • Yes, you should definitely contact the manufacturer head office, as they will not want their dealers to be acting in a (best case) lazy or (worst case) illegal manner. It’s also a good way to encourage an unresponsive dealer to spring into action.

  26. What happens if your finance is arranged through the dealer that you buy your car from and you then discover that the dealer has sold you a car that doesn’t match with the log book? If the dealer refuses to help me, what happens to the finance? Am I still liable for the payments? Can I return the car to the finance company?

    • Hi Bridget. What do you mean when you say that “the car doesn’t match with the log book”?

      The car belongs to the finance company, so you will need to contact them and highlight whatever the problem is. You are definitely still liable for the payments to the finance company, and you will need to work with them to resolve whatever the problem is.

    • Is this a franchised dealer or an independent garage?

      In any case, you need to speak to the finance company, as they will have a lot more clout with the dealer than you are likely to have.

  27. I want a finance car of around £5,500 but I’ve only been employed in my current job for 3 months and in my new address for 11 months. When I did a finance checker it said I needed 3 years each minimum is this a definite no then?

    • Hi Rachel. Most companies will generally want to see about three years of personal and financial history. So you don’t have to have been in your current job or at your current address for three years, but you will have to list your previous employment and residences.

      What they are looking for is evidence of continued income and relative stability of circumstances. If you have had long gaps in employment, or several different jobs in a short space of time, or if you have moved house a lot, it suggests your situation is not very stable and you are less likely to be able to repay the debt.

    • I have a similar problem, I moved to the UK last year in February, when i checked on the finance requirements it stated that they require at least a minimum of three years, does it mean that i can not apply for a vehicle finance?. i have a stable job.

    • Yes, you will probably find that most finance companies will not accept a car finance application unless you have three years of UK employment history. This is especially true if you are applying for a fairly large loan. Some finance companies are able to track your finance history in your previous country, but most can’t or won’t.

      Your bank may be able to provide you with a personal loan which you can use to purchase a car, but the interest rate may be higher due to your lack of UK employment history.

  28. I would like to finance a car that is about 30k in about 5months and my credit score is about 800. I don’t have a credit card only a debit, do I need a credit card to take out finance? and how do I improve my credit score?

    • Hi Maz. No, you don’t need a credit card to be able to take out car finance. Finance companies will look at your credit history/credit score to assess your borrowing history, and also consider your ability to repay the borrowing based on your declared income.

    • Either. A bank will probably be better at explaining your situation and offering good financial advice compared to a car dealer. Compare what the dealer is offering to what the bank is offering to see how competitive they are.

  29. Interesting and informative article. However my concern is that the dealership or finance company can change the terms midway through a financed agreement. I would of course approach it all in good faith but fear that an oncoming recession would prompt these companies ‘on the otherside’ of the deal to change the deal to protect/suit themselves. Is this possible or dare I say it even legal for them to behave in such a manner?

    • Hi Hardeep. The finance company cannot change the terms midway through a contract – all the rates and payments are fixed for the duration. All they can do is terminate it, which is no different to any finance agreement anywhere else.

  30. Hi Stuart,
    I have applied for PCP finance for a new car in a rush, after I took mine in for a health check and got the news it wasnt road worthy. I dont doubt the service department as I have dealt with them for a few years but I agreed to buy a new car in a rush and now im regretting it.
    I signed the vehicle order form and application for finance today, but if it comes through do I have to go ahead with it? If there is a cooling off period it was not explained to me and is nowhere in writing. I paid a £500 deposit and would be happy to have that go against a used car at the same garage if they allowed me to.

  31. I wasnt asked any questions regarding credit cards,existing finance,other debts etc. Is this normal when applying for a pcp agreement

    • Hi Paul. That’s quite normal. The finance company will check your credit score and credit history as part of your application, but that information isn’t shared with the dealership. The dealer provides the information you supply to the finance company, who will then make an assessment. The dealer should have no part in deciding whether to accept your application.

  32. I have a poor credit rating if 622 and I'm wanting to purchase a car for 11k I have 7k cash would I be accepted for finance I am in a stable job etc

    • I'm afraid this will be unlikely. If it was likely your premiums would be very high. My advice would be to buy one ounce of cocaine and turn it into an ounce of crack. then sell the crack at 0.01 of a gram for £25. This should hopefully get you out of this situation as you will not need more finance.

    • I am a CFA and this is solid advice, you should also consider Crystal Meth, I have seen a documentary called Breaking Bad. This should help you understand the pros and cons of this industry and your path to the Vauxhall Corsa of your dreams.

  33. Hi, thanks for the informative articles. I am taking out a personal contract hire (PCH) plan on a Vauxhall Corsa. However, I am unsure whether I should pay a higher deposit and have lower monthly payments or vice versa. What are the pros and cons of both and will I be charged more interest if I pay a higher monthly rate. I have been quoted a fixed rate of interest at 2.84%pa and a representative APR of 4%. Thanks.

    • Hi Patrick. Ultimately, you pay interest on every pound financed/leased, regardless of whether it is a PCP or PCH. So even if the rates improve with more borrowing, you will still be paying more in total.

  34. I want to swop my car for a newer one.i paid my finance bubble off in November but now have a ccj from 6years ago. Can I get credit at a reasonable rate?

    • Hi Lorraine. Each case will be reviewed individually, so it may be that the finance company will be happy to approve you. With car finance, the rate should not be affected by your CCJ – it is an advertised figure and should be available to anyone. If you are approved for finance, it should be at the same rate as anyone else.

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