Can I get a used car on finance?

Can I get a used car on finance?

12 May    Finance News

Buying a car in 2022 presents new challenges.

Indeed, the COVID-19 pandemic led to a sudden and unexpected fuel production and consumption drop. The hesitancy and slow response to the post-pandemic environment have caused imbalances in the supply-demand market. As a result, people in the UK have faced disparities between their fuel needs and the available fuel, which drove panic fuel buying for petrol and diesel. As a result, drivers in the UK have involuntarily added disruptions to the recovery journey of road fuel supply.

The current conflict in Ukraine has seen oil prices soar all around the world. Sanctions such as phasing out Russian oil imports by the end of 2022 will inevitably drive oil prices higher than they already are. So, it makes sense for British drivers to consider fuel-saving alternatives for everyday commutes, from fuel-efficient cars to electric vehicles. It is no surprise that the market for used EVs is growing exponentially in the UK in 2022, hitting a new record with over 14,500 transactions for used all-electric vehicles during the first quarter of the year. So, if you are also looking for the best solution to reduce dependency on Russian oil and fuel and avoid being hit by the imminent fuel crisis, you may be interested in learning more about car finance UK based. Below we consider how you can get a used car on finance to save on fuel costs.

What options are available for car finance used car?

As a rule of the thumb, the finance options available on the used car market are roughly similar to what you would find when you purchase a brand new vehicle, with the exception of leasing — which is less common for used cars.

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Buyers have more leverage to negotiate prices with a private seller. Yet, if you decide to purchase from a private seller, you need to seek financing solutions yourself.

Some lenders provide car financing services for a private car sale. However, to be able to apply for financing, you will need the seller to provide additional information, which not all private sellers agree to do. Additionally, buyers receive less protection in a private sale than they would with a dealership, which is why it can be tricky for buyers to find financing.

Alternatively, you can also apply for a personal loan, which can be used to finance your vehicle. Yet, bank loans can be difficult to obtain depending on your current credit score and credit history.

On the other hand, most car dealers can provide a range of financing options. If you purchase from an accredited dealership, you can access used car credit finance even if you have a bad credit score.

How does the used car finance process work?

Unlike a bank, car dealerships have a keen interest in finding the best financing solution for their customers. Consequently, the eligibility criteria for financing options for a used vehicle are less strict than they would be in a banking institution, as dealerships can work with a variety of money lenders. Additionally, the decision-making process is already considerably faster.

The main points of difference between a car loan and car financing through a dealership include:

  • Creditworthiness eligibility
  • Budget-suited payments
  • Rapid decision
  • One contact point for financing and purchase of the used vehicle

For buyers who want to upgrade their vehicles for a fuel-efficient option but are concerned about financing, buying a used car on finance through a licenced dealership can provide the peace of mind they need.

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Do used electric vehicles have different financing options?

Buyers thinking ahead of the fuel crisis and prefer to seek petrol-free options can also find sufficient financing solutions for electric vehicles. Dealerships specialising in electric vehicles can also provide a range of credit and finance agreements for their customers. We strongly recommend against private sales, as you want to ensure the vehicle has received the necessary care and maintenance to retain its value.

The UK plug-in car grant provided by the government for the purchase of electric vehicles only applies to new zero-emission cars. Used vehicles are not eligible for the PiCG. While the grant has helped the funding of over 285,000 new electric vehicles in 2021, it doesn’t cover more than 35% of the car price. If you are considering a used vehicle for cost-saving reasons, the plug-in car grant is not a reasonable solution.

Is leasing a used car financing option?

Leasing is less frequently seen for used vehicles. Yet, the dealership can provide a Personal Contract Purchase option. The PCP finance contract agrees on a number of monthly payments for the vehicle, at the end of which you must return the car. If you wish to purchase the vehicle, you are required to make an additional balloon payment.

In conclusion, if you are considering upgrading your vehicle ahead of the fuel crisis, there are many different financing options for used car purchases to suit your needs and budget.

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