What is car finance?

Help & Advice

Car finance is a way for you to buy a new or used car by spreading the cost over a period of months. So, instead of having to pay everything upfront, you can split the cost into manageable amounts that are paid in regular monthly instalments.

There are four main types of car finance available through Zuto, the most popular of which is Hire Purchase, or HP as it’s more commonly known. The other financing options are Personal Contract Purchase (PCP), Conditional Sale and Personal Loans

One in five people used a car credit product like these to purchase a car in 2016, according to Mintel’s Car Finance UK report (May 2017).

To understand which car finance product is right for you depends on how long you’re likely to keep the car, your current credit profile and how much you can afford to repay on a monthly basis. For more information, why not check out our Car Finance Explained page here.

Another term you may see when you start to look at buying a car is Car Leasing. However, Zuto doesn’t offer this option.

If you see the term 'guaranteed finance', it’s important to remember that no one can guarantee your application will be successful until they’ve taken your personal details, noted which car you want and checked your credit file. All of these things will make a difference to your likelihood of being accepted or not, so when you see the words ‘guaranteed finance’, it’s usually a good reason to be cautious.

Arrange a call back

Opening hours:
9am to 8pm Monday - Friday
9am to 6pm Saturday
10am to 6pm Sunday and Bank Holidays