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Why buy a used car on finance

Why buy a used car on finance

Why Should You Buy a Used Car on Finance?

According to the AA, most new cars lose around 40 per cent of their value during their first year on the road. This is why entering the used market has become second nature for so many motorists - it's the best way to avoid such hard-hitting depreciation.

That said, buying a car will still be a big decision to make for most people, regardless of how old it is. It's one of life's more expensive purchases, so it's important to ensure the transaction is affordable and manageable. This goes some way to explaining why car finance is such a popular option these days. With this in mind, let's take a closer look at some of the benefits...

The ultimate flexibility

Not everyone is in the same situation financially. Coming up with thousands of pounds in one lump sum won't always be a feasible option. Even with finance, it'd be wrong to assume that every buyer will be ready to produce the same kind of deposit and complete monthly payments of the same size. Thankfully, finance packages come in all shapes and sizes, meaning the right one can be picked to suit your own circumstances and priorities.



Personal contract purchase (PCP), for example, is perhaps the most flexible option and is perfect for those who like to change their vehicle regularly. With the car's end-of-agreement value determined in advance, the monthly payments will be lower and the issue of depreciation is eradicated completely. While a used car won't lose its value quite as rapidly as a new one would, this still helps to ensure you're getting the most for your money. The down side with PCP is that it is normally only available on almost new cars that therefore have a higher purchase price.

For those who prefer ultimate simplicity, hire purchase (HP) may be a more suitable option. With fixed interest rates and monthly payments, it's finance at its easiest. This too is extremely flexible in that the monthly payment amounts are directly linked to the initial deposit and can be adjusted to suit. Again, with a used car, both the deposit and repayments are likely to be lower than with a new model.

Tailored finance packages allow even those with low credit scores to find the vehicle that best suits their needs, safe in the knowledge that their payment plan will fit comfortably around their budget and lifestyle. If, for example, you need to bring the monthly repayments down but have a bigger lump sum to begin with, it's usually possible to pay a larger deposit. This works both ways, with bigger payments making for a smaller deposit.

The same goes for the 'buy now, pay later' agreements offered by many dealers - they involve deferring the first payment for a number of months so there's no waiting period between choosing a car and getting the initial money together. While most people like to plan ahead of their next major purchase, it isn't always possible to know when you'll need a new vehicle, so this option can prove particularly useful.


Spreading payments

Even if it is a feasible option, spending thousands of pounds at once is likely to dent anyone's bank balance. When you've spent years building your savings up, the last thing you need is to blow it all in one go and be forced to start again; after all, you never know when you'll need it. Finance is a great way to minimise the impact by spreading it out over time. By making smaller payments over a period that suits you, you'll be in a better position to keep your savings where they belong: in your bank account.


Sub-prime finance is not guaranteed and may cost more than finance provided by a prime lender. We will try to obtain finance for you but there is no guarantee. It may be from a sub-prime lender, and if so, the cost of finance may likely be at a higher rate than prime lenders offer.


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