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Car finance

Buying a car is a significant investment that can put a strain on your finances. Car finance can be an excellent option for those who want to purchase a vehicle but don't have the cash up front. With different types of car finance available, it can be a challenge to understand which option best suits your needs.

What is car finance?

Car finance is simply the process of taking out a loan to buy a car. It's a way to spread out the cost of a vehicle over a period of time rather than having to pay for it all up front. This can be really helpful for people who can't afford to pay the full price of a car at once.

How does car finance work?

Car finance spreads out the cost of a car purchase over a set period of time. When you opt for car finance, you borrow money from a lender to pay for the vehicle. You then repay the car finance in instalments over an agreed-upon timeframe, which is typically a few years.

The amount you can borrow and the interest rate you'll pay will depend on various factors, such as your credit score, income, and the price of the car. If you have a good credit score and a stable income, you're more likely to be approved for a loan with favourable terms, such as a lower APR.

Types of finance

There are different types of car finance, like car loans, hire purchase and personal contract purchase (PCP), so you'll want to do some research to figure out which one is best for you.

Car loans

A car loan is a type of finance arrangement that helps car buyers cover the cost of their purchase. The buyer borrows a lump sum of cash up front and then makes monthly payments over a set amount of time (which can vary depending on the agreement type).

Learn more about car loans

Hire purchase


Hire purchase is a type of car finance where you make fixed monthly payments over a pre-arranged period of time until you’ve paid off the full cost of the car, plus any interest. During the hire purchase agreement you essentially hire the car from the lender until you’ve paid off the full amount owed. After all payments have been made, including the final ‘option to purchase’ fee, you will own the car outright.

Learn more about hire purchase (HP)

Personal contract purchase

Personal contract purchase (PCP) is a type of car finance that allows you to make lower monthly payments on a vehicle by deferring a significant portion of the cost to the end of the agreement. With PCP, you won’t own the car until you’ve made the final lump sum payment, known as the ’balloon’ payment.

Learn more about Personal contract purchase (PCP)

Personal contract hire

Personal contract hire (PCH) is a type of car finance that allows you to lease a vehicle for a set timeframe, typically between two to four years. With PCH, you don't own the car, but you have the right to use it for the duration of the contract in exchange for monthly payments. At the end of the agreement, you simply return the car to the leasing company and have the option to start a new lease on a different vehicle.

How to finance a car with Oodle

  • Sort the finance

    Set your budget, and we'll review your finance application within minutes so you're good to go.

  • Choose your car

    Browse thousands of cars online from one of our trusted dealers.

  • Ready to buy

    Once you’ve chosen the right car, you're ready to buy. Our team will help you every step of the way.

  • Drive away happy

    You've just bagged the best car for your budget.

Am I eligible for car finance?

When you apply for car finance, you’ll be subject to credit checks and certain eligibility checks by your lender to help them decide whether they’re able to offer you a finance agreement. You will need to provide:

  • Proof of age (all applicants must be aged 18 years or over to be considered for car finance)
  • Proof of address (typically you’ll have to show where you’ve lived for the past three years)
  • Proof of earnings (personal, and household if you have dependents such as children)
  • Employment status
  • A full or provisional, valid UK driving license
  • A guarantor (if requested by your lender)

Oodle doesn’t request guarantors but may ask for a ‘joint applicant’ to support your application if the amount you want to borrow is deemed to be outside of your affordability. The joint applicant will be assessed across income, residential status, totals for outstanding credit and the level of affordability, and will become a joint customer listed on the agreement.

Vehicles financed by Oodle must meet certain criteria before we’re willing to finance them (eg. age, mileage, price, condition, etc).

Although not everyone will get a finance deal with Oodle, there are other options out there; even if you have a low credit score, it is worth checking to see what might be available.

Check your eligibility with our car finance calculator

12 months
60 months

Your monthly payment


Total borrowed


Total cost of credit


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* Representative Example: With hire purchase credit of £10,000 over 60 months based on a cash price of £10,000 with £0 deposit and a representative APR of 15.9%, the amount payable would be £235.92 a month, with a total cost of credit of £4,255.20 and total amount payable of £14,255.20. The total amount payable includes a £50 documents fee and £50 option to purchase fee.

This calculator is for illustrative purposes only. The calculated monthly repayment is not a quote or an offer of finance. Our finance rates vary and depend on individual circumstances. You will not own the vehicle until you have made the final payment and the option to purchase fee. Lending is subject to status and available to applicants over 18 years old.

Commonly asked questions about car finance

  • Can I get car finance if I have a bad credit score?

    You don’t necessarily have to have a good credit score to be approved for car finance – but it helps! Some lenders are willing to help borrowers with a poor credit score, and a few even specialise in poor credit history finance.

    So, if your credit score isn’t great, it doesn’t necessarily mean that you won’t be able to finance your car. It just means that you might have to shop around to find the right lender for you.

    Be careful though: if you’re struggling to pay off your existing debts it’s always best to get on top of these first before borrowing more. Talk to your lenders to make a plan to get your finances back on track. This will help to improve your credit score.

  • Will applying for finance affect my credit score?

    When you apply for car finance, many lenders will start with what is known as a ‘soft credit check’ as part of the application process. This type of credit check won’t impact your credit score.

    If you’re unsure about your credit score and would prefer to know before applying, you can check your credit score for free on these sites:

    ●      MoneySavingExpert Credit Club

    ●      Credit Karma

    ●      ClearScore

    Not all lenders offer a soft credit check, but those who do should make it clear at the beginning of the process – as we do at Oodle.

    We will only register what is known as a 'hard search', which is visible by other lenders, if you are approved for finance with us and you decide to take up that finance. This is done once you have signed your agreement with us.

  • Can you part exchange a car on finance?

    Yes, it’s possible to part exchange your car if there’s still some finance left to pay on it – although this should always be discussed with your lender before you do.

    The process would involve repaying the amounts outstanding under the existing car finance agreement. If the amount remaining on your finance agreement is more that your current car is worth, then you are in negative equity.

  • What checks are done for car finance?

    When applying for car finance, lenders will typically carry out several checks to assess your creditworthiness and determine whether you're a suitable candidate for a loan. These checks may include:

    1. Credit check: Lenders will check your credit history and credit score to determine your creditworthiness. This includes looking at your payment history, outstanding debts, and any defaults or missed payments.
    2. Affordability check: Lenders will assess your income and outgoings to determine whether you can afford the monthly payments on the loan. This includes looking at your employment status, salary, and any other sources of income.
    3. Identity check: Lenders will verify your identity to ensure that you are who you say you are. This includes checking your name, address, and date of birth against public records.
  • How much car finance can I get?

    The amount of car finance you'll be offered can depend on a number of factors, including your credit history, income, and expenses. Generally, lenders need to be sure that you’ll be able to repay the loan when deciding how much to lend you.

    To get an idea of how much car finance you can get, you can use a car finance calculator. Keep in mind that this is just an estimate, and the actual amount you're offered may be different depending on the lender's criteria.