Car Finance To Suit You To Suit You

Rates from 10.9% APR. Representative APR 19.9%

Audi A1
CAR FINANCE SOLUTIONS

Car Finance.

The dilemma most of us face when purchasing a car is how we are going to pay for it. Understanding the main finance deals offered is key to securing the best car deal for your circumstances.

Bright Motor Finance aims to provide a useful outline but does not replace expert financial advice. We recommend you read the information for an overview in preparation to compare motor finance deals and if necessary, seek tailored insight from a financial advisor.

For now, let’s get started with our overview of the main finance options available when purchasing a vehicle.

HP Car Finance.

Hire Purchase (HP) car finance allows you to hire the vehicle until you have completed all repayments. Deposits are typically around 10%. Repayments are spread across the duration of the finance deal. When you have made all your repayments, the car belongs to you. Until then, the car is owned by the finance company.

PCP Car Finance.

Personal Contract Purchase (PCP) finance is a complex financial product. The key feature separating PCP finance deals from others is the way in which monthly installments are calculated and how they are repaid. Other finance options spread the cost of the vehicle. PCP finance measures the “minimum guaranteed future value”.

Personal Leasing Car Finance.

This is a popular option for drivers who do not want to own a car. Also referred to as contract hire, personal leasing finance offers the lowest monthly repayments. However, the initial deposit is larger than the other two finance options. Often as much as three months’ rent paid in advance.

Conditional Sale.

This type of car financing is very similar to a Hire Purchase contract, but at the end of your finance agreement, you automatically own the car. You own the car once you have completely repaid the loan, so you don’t have to give it back to the dealer, unlike HP and PCP agreements.

Payment History
35%
Amount You Owe
30%
Length of Credit History
15%
New Credit Opened
10%
Type of Credit
10%

Credit Score Breakdown.

What Factors Affect Your Credit Score?

Financial well-being is strongly influenced by people’s credit scores. Your credit score is a measure of your financial responsibility. The higher your credit score, the better your chances of getting car finance with lower interest rates, and other benefits. Having a low credit score may prevent you from qualifying for a car loan that you may want, or your interest rate for borrowing will be higher than those who have excellent or good credit.

If you seek advice on how to improve your credit score or simply require more information, please visit: Ultimate Guide to Credit Scores

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Rates from 10.9% APR. Representative APR 19.9% Representative Example: Borrow £6,000 with £1,000 deposit over 48 months with a representative APR of 19.9%, the monthly payment would be £182.26, with a total cost of credit of £2,748.61 and a total amount payable of £8,748.61. Car Loans UK is a broker not a lender. This is an example only, all finance subject to status. Lender fees may apply

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Rates from 10.9% APR. Representative APR 19.9%

Frequently Asked Questions.

Why use Bright Motor Finance for motor finance?

At Bright Motor Finance we have many lenders on our panel, so we can make sure you are getting the best motor finance deal for you. Plus, we do all the admin, paperwork and negotiations with the dealer.

How does car finance affect my credit score?

Initially, asking for a car loan will typically have a negative impact on your credit score due to the intensive credit checks that lenders will perform. You should be aware, however, that if you make your car finance instalments on schedule. This will almost certainly improve your credit score.

What is the difference between HP & PCP?

HP and PCP car finance are fairly similar to one another. However PCP tends to have lower monthly repayments. Although that the full amount that will need to be repaid is generally higher than with hire purchase.

PCP works by having a loan for the difference of the vehicles price when it is brand new, and the anticipated vehicle value when the agreement has been completed. This is because the vehicle will of course, depreciate over time.

HP works by usually paying a deposit of around 10% of the cars initial value, and then this value will be paid off in fixed monthly instalments. Car dealers as well as brokers (such as ourselves) can arrange a hire purchase finance agreement.

Can I change my mileage on PCP contracts?

In a nutshell, the answer is no.

This is because the car’s resale value has already been calculated once you’ve signed your PCP car loan contract. It is crucial to know that exceeding your agreed-upon mileage allowance will result in additional penalties at the end of your PCP contract.

What is a car finance brokerage service?

In essence, a car finance broker acts as a middleman between the customer and the lender. A car loan broker handles all the paperwork and negotiates with lenders on your behalf. By doing this, you can rest assured that the broker is fighting for you to get you the best deal. Our goal is to make your car finance journey as simple as possible. As well as this, car finance brokers such as ourselves have deals that aren’t usually available to the general public. Instead of charging the customer, car finance brokers charge the dealerships.

Can I alter my car if I finance it?

You can, but you must first obtain authorisation from the financial firm before making any changes.

What if I have been refused by other brokers?

There is still hope even if other brokers have rejected you in the past. We offer a number of finance options for those with bad credit scores at Bright Motor Finance. We will conduct a hard credit check when you apply for car finance through us, which may negatively affect your credit score. Especially if they were conducted within a short period of time. As a result, it is recommended that you wait between 3-6 months before applying for car finance again after being declined.

It can be quite confusing, but there are three elements of the loan to keep in mind when you’re deciding if this is the right type of loan to help you to buy a car.

Because many car dealers who offer you PCP car finance deals will expect you to pay a 10% deposit. Although occasionally there may be incentives from the manufacturer to entice you, such as a deposit contribution. This is sometimes up to £2000 and is only available if you use their finance option. Also, as with any other loan, the bigger your deposit, the less you’ll need to borrow and the less interest you’ll pay and in turn, opening yourself up to better PCP car finance deals.

Then the amount that you will need to borrow will be calculated based upon the depreciation of the car’s value across the length of your loan term. Then the deposit you put down is deducted from this amount. So, you’ll pay off the amount they calculate, minus your deposit but plus interest, in monthly payments for the length of your loan agreement. PCP agreements include the APR, because it takes into account the interest charged on the outstanding balance and any other fees associated with the loan agreement. Furthermore, a loan agreement lasts for 24 to 48 months and the interest added is usually from 4% upwards.

If you decide that you want to own the car outright at the end of the deal, you can make a final balloon payment. This is also called a GFV or Guaranteed Future Value amount. Then this is calculated according to the amount that your car is anticipated to be worth at the end of your loan agreement. Of course, this is entirely optional, but the amount they set is not usually negotiable.

What if I’m struggling to make payments?

Having trouble making your car finance payments? You have a number of options available to you. One of the following charities/organizations can provide you with free, independent advice. 

What is APR?

The annual percentage rate (APR) is the total amount charged for the loan. APR, on the other hand, comes in two varieties. Exact APR implies that the rate displayed to you is the rate you will receive. Representative APR, on the other hand, suggests that 51 percent or more of those who apply for financing will receive that rate. This means that customers with weak credit may face a higher APR.

Representative APR is commonly used to advertise a company’s rates. After you have provided the lender with all of the essential information, they will be able to provide you with your specific APR rate.

GAP insurance and do you need it?

What exactly is it?

Gap insurance is an abbreviation for Guaranteed Asset Protection.

Gap insurance is a type of insurance that is meant to cover the difference between the amount your insurance provider pays out in the event that your car is written off or stolen and the price you paid for the vehicle. However, you should be aware that gap insurance supplements, not replaces, your usual car insurance.

So, when do you need gap insurance?

Gap insurance can be beneficial in a variety of ways. First and foremost, if you took out a large loan to purchase your car. As previously said, gap insurance would be advantageous if your automobile was stolen or written off. This is due to the fact that the gap will pay off the existing debt.
Furthermore, gap insurance may be advantageous if you are concerned about the depreciation of your vehicle. In the first year, a brand new car will lose 15-35 percent of its value. As a result, gap insurance might assist you in receiving a larger reimbursement if your automobile is written off after it has already depreciated.

What Happens If There Is An Issue With The Vehicle?

If the vehicle is defective upon delivery, you can simply refuse it and return it to the dealership.