How car finance at ClearScore works

Paying in cash for your new car is always going to be the cheapest way to get behind the wheel, as there’s no added interest to pay. But if you don’t have enough saved up, using finance helps you spread the cost into monthly instalments instead.

Arranging your car finance before you hit the dealership gives you more control over your deal and more choice about where you buy your car from. At ClearScore, we search a range of lenders to find market-leading deals and show you how likely you are to be accepted. So you can find the deal that's right for you without the added pressure of the showroom.

Here’s how the process of getting your own finance works, and the reasons why you might want to go down this road (pun fully intended).

The first thing to decide is how much you want to borrow.

With most car finance options, if you have some money to put towards a car you can also use that to lower the amount you have to borrow. Be realistic about what you can afford, never borrow more than you can pay back each month.

Once you’ve decided how much you might need to borrow, you’ll see that there are two options:

A personal loan is often the cheapest way to use finance for a vehicle, especially if you have a high credit score. You also get to choose how long the loan lasts, so you could opt for a longer loan with lower monthly repayments (although you're likely to end up paying more interest overall).

When you check your car finance options in your ClearScore account, you'll see an eligibility score before you apply, so you can be more confident of any application you decide to make.

If your loan gets approved, the loan provider will deposit the money into your account. Then you can go and buy your car from wherever you want. Using a personal loan, the car becomes yours straight away. But this does mean that if you can’t keep up the repayments, you can’t just hand the car back and walk away.

Specialist car finance plans are credit agreements designed especially for buying cars. These plans are offered by a range of lenders and might work well for you if you have a less-than-perfect credit score. With these finance plans, it’s likely you’ll need a deposit (or a car to part-exchange with). The size of the deposit varies depending on your finance agreement.

There are three types of specialised car finance: hire purchase, personal contract purchase (PCP) and personal contract hire (PCH). You can find out the differences between them in our guide to car finance.

At ClearScore, we work with a range of lenders to show you specialised car finance deals from as little as 6.5% APR. We'll also connect you with specialist brokers who will help you figure out the right type of car finance for you based on your budget and needs. This means that whatever your situation, you'll be able to find something suitable - even if you’ve been rejected for car finance elsewhere.

You can get this kind of finance directly from the car dealer. While this may seem convenient, it could leave you with an unsuitable option.

If the thought of arranging your own finance seems daunting at first, don't worry. In reality, it's much easier than it sounds.

Three simple steps and you're behind the wheel:

1. After you click apply on your chosen deal, you’ll be asked to fill out a few extra details to help the lender assess your application. They’ll then approve your application for credit and give you a call to discuss the terms of the finance and the rate you’ll receive.

2. After this, it’s time for the fun bit - finding your car. Most car brokers have a list of thousands of verified dealerships to choose from. This means you can get a car from wherever you wish, rather than being limited to the dealer with the 'best' finance. If you’re not sure what car you want, the car finance broker will even be able to help you search for options suitable to your lifestyle and budget. Sometimes, they can even set up test drives for you.

3. Once you’ve chosen the car, the finance broker will sort everything out. They’ll carry out some history checks on the car to check all is a-okay. They sort the admin, the paperwork, and the negotiations with the dealer. Once everything is finalised you just have to pick up the keys and drive away.