Car finance is a way to spread the cost of a car over time. Instead of paying the full price upfront, you make monthly payments over an agreed term.
Many people use the term car finance to describe different ways of paying for a vehicle. These may include hire purchase, personal contract purchase, leasing, and car loans.
The best option may depend on whether you want lower monthly payments, a clear route to ownership, or flexibility at the end of the agreement.
At Go Car Credit, we offer hire purchase car finance. As a direct lender, you deal with us from application to completion rather than being passed between different companies.
Step 1: Calculate your monthly repayments
Step 2: Apply and track your application online, in real time (No login or app needed!)
Representative example – Total amount of credit £10,500, annual interest rate 18.25% (fixed), charge for credit £9,886.25 (£9,581.25 interest, £295 admin fee and £10 option to purchase fee), total amount payable £20,386.25. Loan term of 60 monthly instalments, 59 payments of £339.60 and 1 final instalment of £349.60. 34.5% Representative APR – Subject to status and affordability.
Car finance is an agreement that lets you pay for a car in monthly instalments, which could make the cost easier to manage than paying the full amount in one go.
The amount you pay may depend on the price of the car, any deposit, the agreement term, the rate, and your own circumstances.
Car finance may suit people who need a car now but want to spread the cost over time with monthly payments that fit their budget.
There are several types of car finance in the UK. The right one may depend on your budget, your credit profile, and whether you want to own the car at the end.
Hire purchase (HP) is the main type we offer. With HP, you may pay a deposit and then make fixed monthly payments over an agreed term. When all payments have been made, the car could become yours, which is why many people choose hire purchase car finance.
Personal contract purchase (PCP) often has lower monthly payments than HP, but it may include a larger final payment if you want to keep the car. MoneyHelper explains PCP in more detail.
Leasing is closer to long-term rental. You pay to use the car for a set period and then return it. This works differently from ownership-focused agreements such as car leasing and hire purchase, and MoneyHelper also explains leasing options.
Car loans are often personal loans used to buy a car. This works differently from hire purchase because the loan is usually separate from the vehicle finance agreement.
This table shows key differences between common car finance options. Terms may vary. You can compare these with MoneyHelper’s car finance guide.
| Option | How payments often compare | Do you own the car at the end? | Final payment | Mileage limits | May suit people who want |
|---|---|---|---|---|---|
| Hire Purchase (HP) | Usually higher than PCP | Yes, once all payments have been made | No large balloon payment | No | A simple route to ownership |
| Personal Contract Purchase (PCP) | Often lower monthly payments | Not unless you make the final payment | Usually yes | Usually yes | Lower monthly payments |
| Leasing | May be lower than HP | No | No | Usually yes | Use of a car without ownership |
| Car Loan | Varies by lender and rate | Usually yes from the start | No balloon payment | No | Buying the car with a loan |
There is no single best option for everyone. The right choice may depend on your budget, how long you want to keep the car, and whether ownership matters to you.
People often use car finance and car loans to mean the same thing, but they are not always the same.
A car loan is often an unsecured personal loan that you use to buy a car. Car finance may include agreements such as hire purchase, where the finance is linked to the vehicle.
At Go Car Credit, we focus on hire purchase car finance because it offers a clearer route to ownership at the end of the agreement.
Car finance often starts when you choose a car, check the monthly cost, and apply.
The lender then looks at your details. This may include your income, your credit history, and whether the payments look affordable.
If the application is accepted, the agreement is set up and you pay in monthly instalments. You can read more about this in how car finance works.
Your monthly cost may change for a few reasons. These include the car price, your deposit, the length of the agreement, the rate, and the type of finance.
A bigger deposit may mean you borrow less. A longer term may bring the monthly cost down, but it may also mean you pay more in total.
People use a car finance calculator to test different costs before they apply.
Each lender has its own criteria, so approval is not based on one thing alone.
A lender may look at your income, affordability, credit history, and how stable your circumstances look. The type and value of the car may also matter.
At Go Car Credit, the first stage uses a soft credit check, which will not affect your credit score. MoneyHelper also explains the difference between soft and hard credit checks.
It may still be possible to get car finance with bad credit. Some lenders may look at more than a credit score on its own.
They may also look at your income, your regular bills, and whether the payments seem affordable.
Go Car Credit helps people with poor or limited credit history through bad credit car finance, with a focus on affordability and personal circumstances as well as credit history.
A deposit is not always needed. Some people choose to pay one to reduce the amount they borrow.
A larger deposit could lower the monthly payment, but in some cases no deposit may be an option. This may depend on the lender, the car, and your own circumstances.
This is why some people look at no deposit car finance when they want to reduce upfront costs.
Yes, car finance may be used for used cars as well as newer ones. Many drivers use finance to spread the cost of a second-hand car.
This may help if you want a reliable vehicle but do not want to pay the full amount in one go.
Used car finance is often a practical option for drivers looking for a more affordable way to buy a second-hand vehicle.
Car finance may still be available if you have fair credit. This means your credit history may not be perfect, but it may be stronger than poor credit.
The options you are offered may depend on the lender, your income, and whether the monthly payments look affordable.
For some people, fair credit car finance may provide more suitable options based on their overall circumstances.
Hire purchase may suit people who want fixed monthly payments and a clear path from start to finish.
It may also suit people who want a simple agreement without the added complexity of a large final payment at the end.
This is why many customers choose hire purchase car finance over other types of car finance.
Some people choose Go Car Credit because we are a direct lender, not a broker. That means you deal with us throughout the process.
We look at affordability and personal circumstances. The first check is a soft search. We are also authorised and regulated by the FCA.
Some customers also read our customer testimonials before they apply.
Car finance is a way to spread the cost of a car through monthly payments over time.
Not always. A car loan is often a personal loan, while car finance may include agreements such as hire purchase.
It may still be possible, depending on the lender and your own circumstances.
Not always. In some cases, no deposit may be available.
At Go Car Credit, the first stage uses a soft search. If you continue later, a hard credit check may be carried out, and the difference between these is explained in hard and soft credit checks.
The first step uses a soft search. This will not leave a mark on your credit file.
Your car finance eligibility may depend on your income, your credit history, and whether the payments look affordable.
