The New Year often sparks change in many people’s lives. Whether that’s putting a down payment on a house, moving to a new place, or expanding your family, we all invest a lot in the idea of new or fresh beginnings. So why should your next car purchase be any different? 

Whether you want a motor fresh off the showroom floor or from the used car dealership, getting a fresh set of wheels is exciting. But then there comes the expense factor. Some models can cost the equivalent of a mortgage, after all. 

Buying a new car doesn’t need to break the bank. Here’s why finance should be your first option when you are looking to buy:

Affordable monthly payments

There are several reasons why finance has become the most popular way to buy a car in the UK, but one of the most obvious factors is the low monthly repayment options. 

Back in the day, paying in cash was the preferred way of purchasing a new vehicle, or at a push, getting a small loan directly from your bank. But the stigma of paying for higher-priced goods with cash is just that, a thing of the past. 

Today, paying for a new car with finance is not only the norm but the most affordable option. It allows you to spread the cost over a fixed term while still having wiggle room to stay on top of your monthly budget. 

No more waiting 

One of the best perks of getting a car loan is that you don’t need to waste time saving up. Instead, you can often be accepted on the day of your online application and can even find yourself driving away in your dream car by the afternoon! 

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You see, car finance isn’t just available at the dealership despite what they might like you to believe. Online, you will find comparable and affordable loans that suit your circumstances and may save you more when you stroll into a dealership. 

Low-interest rates 

Having a good or excellent credit score definitely goes in your favour when it comes to buying a car with finance. You’ll be offered the best rates on the market, with the lowest monthly repayments attached, freeing you up to cover more necessary expenses. 

What’s more, you’re more likely to be instantly accepted and keep boosting your credit score from your timely repayments. Win, win. 

Poor credit score? Don’t worry

While you might be sitting there thinking that car finance just isn’t possible for you due to your circumstances, don’t give up just yet. In fact, the good news is, bad credit car finance is available to applicants who have been rejected from loans before for numerous reasons. 

Bad credit car finance lenders specialise in tailoring a deal that works with your circumstances so that you can rebuild your credit score in the process. Whether you have a default, CCJ, are self-employed or more, they will only ever offer you affordable solutions to get your finances back on track while you drive away in your dream motor. 

While bad credit car loans tend to be higher than your average deal, it’s one of the best ways to manage your budget and allows you to futureproof your next car purchase. 

Access to the safest cars on the roads

Safety may not be your number one priority, but one of the silent perks of newer cars is their higher safety specs. 

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Tested by the Euro NCAP, all vehicles are placed through rigorous testing that includes everything from crash tests to determining how well a vehicle’s driver-assist technologies support safe driving and prevents accidents. 

So if you opt for car finance, you will have access to the latest if not much newer vehicles that typically include the following safety features:

  • Autonomous Emergency Braking (AEB)
  • Adaptive Cruise Control
  • Lane Assist
  • Blind Spot Detection
  • Rear-cross Traffic Assist
  • Reverse Park Assist
  • And many more

More choice

Car finance opens up a whole world of opportunity. Not only do you get access to the best safety features money can buy, but you also have a much broader selection to choose from – including the latest models. 

What’s more, car finance makes buying an Electric Vehicle (EV) far more affordable. While EVs typically have higher upfront costs, the savings you’ll make over the lifetime of your car will quickly add up. Before you know it, you’ve made your money back and more. 

Combined with the government’s Plug-in Grant of up to £1,500 for a new EV below £32,000 (RRP), you can bag yourself a bargain at the dealership and do your bit for the planet. 

Finance options 

Car loans are far more varied today than before, where your typical loan came from the bank (although this is still possible!). 

The three most popular loans are:


  • Hire Purchase (HP):

A HP loan is secured against the vehicle itself and is yours once the final payment has been made. Typically you pay a 10% deposit, and then you repay your remaining balance in monthly installments, plus interest throughout the loan term. 

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Servicing is often included, but the car may be repossessed if you fail to make your payments on time. 

  • Personal Contract Purchase (PCP): 

This loan involves paying a deposit followed by low monthly instalments over a fixed period. However, unlike HP, where the car is yours after your final payment, you can either pay a balloon (lump sum) payment at the end of your contract, return the vehicle or sell it off privately to pay off your remaining balance. 

PCP is based on the projected “minimum guaranteed future value,” so you’ll never pay more for the car’s final worth. 

Always remember with PCP, that you are essentially hiring the car until the final balloon payment is made. So make sure you stick to any agreed mileage limits and keep the vehicle in good condition, inside and out. 

  • Contract Hire/ Personal Lease:

Low monthly repayments, but with zero option to buy the car at the end of your lease, may put some drivers off of this option. However, contract hire is incredibly convenient and allows you to easily change your car. 

Leasing costs are determined by the type of car, agreed mileage limits, and your contract length. You can expect servicing to be included, but be prepared to pay a steep three-month deposit in advance. 

New year, new car? Are you ready to make the change? With so many options available to you through financing, it’s a no brainer. What will your next set of wheels be?