Brumble Guides.
Not all car finance deals are equal. This guide shows you how to compare APR rates, check your eligibility without affecting your credit score, and get a cheaper deal - whether you're buying new or used, with good credit or bad.
Most people don't pay the full price of a car upfront - they use finance. But not all finance deals are equal. The difference between a good deal and a bad one can add up to hundreds or even thousands of pounds over the life of an agreement. The good news is that with a bit of know-how, you can put yourself in a much stronger position before you sign anything.
This guide walks you through how to find the best car finance deals available right now - whether you're buying new or used, have excellent credit or a less-than-perfect score. If you're still getting your head around how car finance works, it's worth reading that guide first.
When you apply for car finance, lenders look at several things to decide what deal to offer you. Understanding these factors is the first step towards getting the best car finance rate you can.
| Factor | How It Affects Your Deal | What You Can Control |
|---|---|---|
| Your credit score | A higher score usually means a lower APR. Lenders see you as less risky. | High |
| Deposit size | A bigger deposit means borrowing less, which lowers monthly payments and total interest. | High |
| Loan term | Longer terms mean smaller monthly payments but more interest overall. | High |
| New vs used car | New cars often qualify for lower manufacture APR rates. Used car finance typically costs a bit more as they're not subsidised. | Medium |
| Type of finance | HP, PCP and personal loans all work differently and come with different rates. See our PCP vs HP guide for a full breakdown. | High |
| The lender | Different lenders offer different rates for the same borrower. Using a broker means you can easily shop around. | High |
| Your income and outgoings | Lenders check you can afford the payments. Stable income helps. | Medium |
The key thing to notice is that most of the factors that influence your deal are things you can control or at least improve. That's what this guide is about - putting yourself in the best position before you apply.
Before applying for car finance, it's well worth checking your eligibility first. A car finance eligibility checker lets you see what deals you might qualify for - without it showing up on your credit report.
When you use a car finance checker (like the one available via Brumble's car finance page), it runs a soft search on your credit file. This means you can check what you might be offered without leaving any mark that other lenders can see.
If you then decide to go ahead and formally apply, the lender will carry out a hard search. This does appear on your credit report and can affect your score if you make too many applications in a short space of time. That's exactly why checking your eligibility first is a smart move - you can shop around without the impact of a full application
Many car finance checker free tools are available online. They typically ask for a few basic details - your name, address, income and employment status - and give you an idea of what rate and amount you could be approved for. Think of it as a preview before you commit to anything.
All car finance is subject to status. The deal you're shown during an eligibility check is an indication based on the information you provide - the final offer may differ once a lender completes a full assessment. Your eligibility depends on your personal and financial circumstances.
Finding cheap car finance isn't just about picking the lowest monthly payment - that's one of the most common mistakes people make. Two deals with the same monthly figure can have very different total costs depending on the term length, fees and whether there's a balloon payment at the end.
Here's what to actually look at when comparing car finance deals:
| What to Compare | Why It Matters |
|---|---|
| APR (Annual Percentage Rate) | The single best number for comparing deals. It includes interest and fees, so a low APR car finance deal will almost always cost less overall. |
| Total amount payable | This is the true cost - deposit + all monthly payments + any balloon payment or fees. Always check this, not just the monthly figure. |
| Monthly payment | Important for your budget, but don't judge a deal by this alone. A lower monthly payment often means a longer term and more interest. |
| Balloon payment (PCP) | If you're on PCP, this is the large lump sum to keep the car at the end. Make sure you know what it is before you sign. |
| Mileage limits (PCP) | Going over your annual limit means paying an excess charge per mile when you hand the car back. |
| Fees | Look for arrangement fees, option-to-purchase fees, or early settlement charges. These all add to the total cost. |
If you're not sure whether HP or PCP is better for your situation, our PCP vs HP comparison guide breaks down the key differences.
Let's say you're looking at used car finance for a car worth £15,000. Here's how two deals with similar monthly payments can look very different:
Term: 60 months
Deposit: £1,500
Total payable: £18,840
Total interest: £3,840
Term: 48 months
Deposit: £1,500
Total payable: £16,956
Total interest: £1,956
Deal B costs £33 more per month but saves almost £1,900 in total interest. That's why the total amount payable is the number that really matters. A car finance calculator can help you run these numbers for your own budget before you apply.
Check your eligibility in minutes with a free soft search - no impact on your credit score.
Check Your EligibilityCredit is subject to status. A hard search will be applied if you choose to proceed with a formal application.
Yes - but it's important to be realistic about what "good" looks like. If you have a lower credit score, lenders see you as higher risk and will charge a higher APR to reflect that. According to FCA research, around 19% of car finance holders are on deals above 15% APR, and many of those are borrowers with less-than-perfect credit histories.
Bad credit car finance is widely available, but the rates vary enormously. Here's a rough guide to what you might expect:
| Credit Profile | Typical APR Range | What This Means |
|---|---|---|
| Excellent | 5% – 8% | Best rates available. Clean history, stable income. |
| Good | 8% – 13% | Competitive rates. Minor blemishes may push the rate up slightly. |
| Fair | 13% – 20% | Higher rates. May have missed payments or thin credit history. |
| Poor | 20% – 40%+ | Specialist lenders. Expect a higher deposit requirement too. |
If your score puts you in the "fair" or "poor" bracket, low credit car finance options do exist - but it's worth weighing up whether now is the right time, or whether improving your credit score first could save you a significant amount.
For a deeper look at finance types and which might work best for your situation, our how does car finance work guide covers everything in detail.
Applying for a car finance online application is usually straightforward. Most lenders and comparison services let you do everything from your phone or laptop. Here's what the process typically looks like:
Check your eligibility Use a free car finance checker to see what deals you might qualify for. This uses a soft search. You can do this via Brumble's car finance partner.
Compare your options Look at the APR, total cost and monthly payments across different deals. Don't just go with the first offer - compare at least a few options to make sure you're getting a fair rate.
Choose your deal and apply Once you've found the right car finance deal, you'll fill in a full application. This is where the lender runs a hard search on your credit file to confirm your details and make a final decision.
Get your decision Many lenders give a decision within minutes. If approved, you'll receive a finance agreement to review and sign.
Read the agreement carefully Before you sign, check the APR, total amount payable, any fees and the terms for early repayment. Make sure everything matches what you were quoted.
You have a 14-day cooling-off period after signing a car finance agreement. If you change your mind for any reason, you can withdraw without giving a reason - although you'll need to repay the amount borrowed plus any interest up to that point. This is your legal right under the Consumer Credit Act.
Check your credit score before you do anything else Know where you stand. If your score needs work, even a few months of improvement can make a real difference to the rate you're offered.
Use a car finance eligibility checker first A soft search lets you see indicative offers without affecting your credit score. Check your eligibility via Brumble to see what deals are available to you.
Save for the biggest deposit you can Even an extra £500 reduces the amount you borrow, which means less interest and lower monthly payments.
Choose a shorter term if you can afford it As our example above showed, a shorter loan term can save you thousands in interest - even if the monthly payments are a bit higher.
Compare the total amount payable, not just the monthly figure This is the golden rule. The total cost tells you exactly what the finance will cost you from start to finish.
Don't just take the dealer's finance offer Dealers sometimes offer competitive rates, but not always. Compare their offer against what you can find independently to make sure you're getting the best car finance deals right now.
Think about whether you need a car loan or a car finance agreement A car loan (personal loan) means you own the car from day one, while HP and PCP agreements mean the lender owns it until you've paid in full. Each has pros and cons - our car finance explained guide can help you decide.
See what deals you could be eligible for - it only takes a couple of minutes and won't affect your credit score.
Compare Car Finance DealsCredit is subject to status. If you go on to apply, a hard search will be carried out by the lender.
The best APR rates tend to sit between 5% and 8% for borrowers with excellent credit. However, the rate you're offered depends on your personal circumstances - your credit history, the amount you want to borrow, the term length and the type of finance. FCA research from 2025 found the average reported interest rate was around 7.4% for new cars and 8.5% for nearly new vehicles.
Yes. A car finance calculator lets you enter the amount you want to borrow, the APR and the term length to see an estimate of your monthly repayments and total cost. It's a useful tool for comparing different scenarios before you apply, but remember the actual rate you're offered may differ based on your credit profile.
It depends. Dealers sometimes offer promotional rates, especially on new cars, which can be very competitive. But it's always worth comparing their offer with what's available elsewhere. Using a car finance eligibility checker before visiting a dealership gives you a benchmark to compare against.
No. An eligibility check uses a soft search, which is only visible to you and doesn't affect your credit score. Other lenders can't see it. However, if you go on to make a formal application, the lender will carry out a hard search, which is recorded on your credit file. This is why it's smart to use a free car finance checker first.
Yes, bad credit car finance is available, though the rates will be higher. Specialist lenders offer car finance to people with lower credit scores, CCJs, or missed payments. The APR can range from around 15% to over 40%, depending on the severity of your credit issues. Improving your score before applying - even by a small amount - can make a noticeable difference to the deal you're offered.
There's no single minimum score, as different lenders have different criteria. Generally, a higher score gives you access to better rates. Even if your score is low, you may still be approved - but expect to pay a higher APR. Checking your eligibility with a soft search is the best way to find out where you stand without any risk to your score.
Most online applications give a decision within a few minutes. Eligibility checks are usually instant. The full process - from checking your eligibility to receiving a finance agreement - can take as little as a day, though it varies depending on the lender and whether they need any additional documents from you.
It depends on what matters most to you. HP gives you full ownership at the end with no mileage limits, which suits people who want to keep the car long-term. PCP offers lower monthly payments but comes with mileage restrictions and a large balloon payment if you want to keep it. Our PCP vs HP guide compares them in full detail.
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