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Purchasing a vehicle on finance means choosing
from various available lines of credit. The two most
popular of all are specialist car financial
agreements and secured loans.
The question being - which is better?

Car Finance vs Personal Loan

28, May 2019

To help shine a little light on the issue, we’d detailed the advantages and disadvantages of both credit services below. If you still have questions or wish to discuss your requirements in more detail, contact the team at PoorCreditCarFinance.co.uk today.

Unsecured Personal Loans

An unsecured personal loan is a popular credit facility that can be used for almost any purpose. The funds requested are provided in the form of a lump sum, which can be repaid over a period of anything from six to sixty months. As the name suggests, unsecured personal loans are issued without the need for collateral on the part of the applicant. Instead, eligibility is determined in accordance with the financial status and credit history of the borrower. Personal loans are flexible, versatile and affordable, though aren’t always easy to qualify for.

Unless you have a good credit score and can provide proof of income, you may be unable to qualify for an unsecured loan. Mild to moderate credit score damage won’t necessarily count you out of the running, but could make it more difficult to qualify for an affordable deal. If you have a chequered financial history or CCJs against your name, we strongly suggest working exclusively with specialist lenders, as opposed to major High Street banks.

Hire Purchase

The single most common type of car finance in Britain is the hire purchase agreement. Hire purchase is provided in the form of a loan secured against the vehicle, which throughout the repayment period remains the property of the lender. It’s only when the loan and all associated borrowing costs have been repaid that ownership is transferred to the borrower.

Accessibility is the main advantage of the hire purchase agreement. As the loan is secured against the value of the vehicle, it’s easier to qualify for hire purchase with an imperfect credit score. Deposits are usually required before the remaining funds are provided, after which the loan is repaid over a period of one to five years.

Hire purchase agreements can be particularly useful for poor credit applicants, who may struggle to qualify for traditional personal loans.

Once again,
PoorCreditCarFinance.co.uk works closely with the UK’s leading car finance specialists, offering access to exclusive deals and discounts you won’t find on the High Street.

Personal Contract Purchase

It’s also possible to finance a vehicle purchase by way of a personal contract purchase agreement. As with a hire purchase agreement, an initial deposit is payable followed by a series of monthly instalments. The difference with a personal contract purchase is that the monthly instalments simply cover the depreciation of the vehicle’s value, rather than its overall cost.

The guaranteed future value of the vehicle is calculated at the beginning of the agreement, in accordance with various factors such as your estimated annual mileage, the current and prospective future value of the vehicle and so on. This results in significantly lower monthly repayments, though a larger final ‘balloon payment’ to take ownership of the car when the agreement comes to an end.

Personal contract purchase agreements are uniquely flexible and also provide the opportunity to drive a new car every three years, without having to sell on the previous car. If you think a personal contract purchase agreement is right for you, we’ll guide you through the process of finding the best deal from the UK’s highest-rated specialist lenders.

PoorCreditCarFinance.co.uk is here to provide the expert support and advice you need to determine which of these vehicle finance solutions best suits your requirements.

Call PoorCreditCarFinance.co.uk today for an obligation-free consultation with a member of the team!

What Our Customers Say

Don’t just take our word for it – check out what some of our satisfied customers have said about

  • Helpful and informative

    “From not knowing what car I wanted right through to getting accepted he was really helpful and informative. Good company to go with if your credit isn’t the best!”

    Ian Campbell

  • My advisor was perfect, 5 Stars

    “I have a less than perfect credit history. My advisor, was awesome. She made the procedure easy and kept me informed every step of the way. All done in 1 or 2 days if you have your IDs to hand… perfect 5*****.”

    Glen Johnson

  • Made my life so much easier

    “After pretty much giving up hope on getting finance for a car, a friend suggested the Poor Credit Car Finance site. After speaking to the fantastic Josh, he made the whole process hassle-free, easy to understand and was super-helpful.”

    Gary Randell

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