Top 10 Questions Our Customers Ask About Vehicle Finance
Are you considering vehicle finance but feeling unsure about how it works? You’re not alone! At Motor Loans R Us, we frequently receive questions from customers eager to understand their options and find the best car finance deals in the UK.
To help, we’ve compiled the top 10 questions about vehicle finance, complete with straightforward answers to guide you.
1.What Is Vehicle Finance?
Vehicle finance is a way to spread the cost of buying a vehicle. Instead of paying upfront, you’ll make monthly payments, often with added interest. Some agreements let you own the car at the end, while others allow you to exchange or return it.
2. What Are The Different Types of Vehicle Finance?
In the UK, the most popular types of vehicle finance are:
- Hire Purchase (HP): Own the vehicle outright after completing payments.
- Personal Contract Purchase (PCP): Make lower monthly payments with an optional final payment to own the vehicle outright.
- Lease Purchase: Similar to a lease/rental agreement but you will own the vehicle at the end of the deal.
Each option suits different budgets and lifestyles. Not sure which is right for you? Check out our Vehicle Finance Comparison Guide.
3. How Does My Credit Score Affect My Eligibility?
Your credit score determines the likelihood of approval and the interest rate you’ll be offered. A high credit score can secure better deals, but don’t worry – there are options for those with poor credit, too.
4. What is a Balloon Payment?
A balloon payment is a lump sum at the end of a PCP deal if you decide to purchase the vehicle. This payment is optional; you can return the vehicle or refinance it if you don’t want to pay the balloon payment.
5. Can i get vehicle finance with bad credit?
Yes, it’s possible! At Motor Loans R Us, we specialise in finding finance deals to suit everyone. While interest rates may be higher, we’ll help you secure an agreement that suits your budget.
6. What happens if I miss a payment?
Missing payments can negatively affect your credit rating and lead to extra fees. If you’re struggling, contact your lender as soon as possible – they may offer solutions like restructuring your agreement.
7. Can I settle my finance early?
Most agreements allow for early settlement. You may need to pay an early termination fee, but doing so can reduce overall interest costs. Ask your lender for a settlement figure if this is something you’re considering.
8. Are there mileage limits with vehicle finance?
Mileage limits usually apply to PCP agreements. If you exceed these limits you’ll likely face additional charges. Be realistic when estimating your annual mileage to avoid surprises.
9. Do I need a deposit?
Many vehicle finance deals require a deposit of around 10-20% of the vehicle’s price. However, no-deposit vehicle finance is available for eligible customers, helping you drive away with no upfront cost.
10. What documents do I need to apply?
To apply for vehicle finance, you’ll typically need:
- Proof of identity (e.g. passport, driving licence)
- Proof of income (e.e payslips, bank statements)
- Proof of address (e.g. utility bills)
We’ll guide you through the application process to make it as smooth as possible.
Start Your Vehicle Finance Journey Today!
At Motor Loans R Us, we’re committed to making vehicle finance easy and accessible. Whether you’re looking for a new or used vehicle, we’ll find the best deal to suit your needs.
Ready to get started? Apply for Vehicle Finance or Contact Us today!