29 May 2024

How to Finance a Used Car

Company News

When it comes to buying a used car, there are many different ways to finance it and spread the cost. With the different options available, it can be difficult to know which one is right for you. In this article, we explain the different used car finance options available, so you can find the option that suits you best.

How to finance a used car

How Does Financing a Used Car Work?

When financing a used car, there is a credit agreement between you and the lender. A finance agreement means that you can pay for the used car over an agreed period of time, with interest payable on the loan balance. Most agreements will require you to pay a non-refundable deposit, followed by regular instalments.

Car Finance at Lloyd Motor Group

What Are The Different Types of Used Car Finance Available?

Personal Contract Purchase (PCP)

With PCP, you’ll pay a deposit followed by fixed monthly payments. At the end of the contract, you can either pay a balloon payment and keep the car, exchange the car, or give the car back (subject to vehicle mileage and condition).

Hire Purchase (HP)

Like PCP, you will pay a deposit and fixed monthly payments if you opt for HP. However, there will be no balloon payment at the end of the contract, as the rest of the value of the car is paid within your monthly instalments; you’ll just need to pay a small Option to Purchase fee at the end of the contract and the car will be yours. With HP, the payments will likely be higher than if you opt for PCP, but you will own the car once the contract ends and you’ve made all payments.

Personal Contract Hire (PCH)

With PCH, you’re leasing the vehicle, with no option to purchase it at the end. You’ll pay a deposit followed by fixed monthly payments, and return the car at the end of the agreement.

Personal Loan

Getting a personal loan from a bank is another popular way to finance a used car. These are repaid on a monthly basis with the bank. With this option, you would instantly own the car and pay the loan back to the bank, with interest, over an agreed period of time.

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Personal Loan

Own the car from the start.


Requires a deposit.




Fixed monthly payments.





Own the car at the end.




Excess mileage charge.




Which Used Cars are Available to Finance at Lloyd Motor Group? 

We’re proud to offer a huge selection of used cars from a variety of leading manufacturers, including BMW, MINI, Jaguar, Land Rover, Volvo, Kia and more. All of our used vehicles are available to finance, from Manufacturer Approved used vehicles to the premium used cars available on our Lloyd Select scheme. Amongst our inventory, you'll find affordable used petrol, electric and hybrid models, with both automatic and manual transmissions. Explore the used vehicles we have below by manufacturer, transmission and powertrain.

Used BMW  Used MINI
Used Land Rover Used Jaguar 
Used Kia Used Volvo
Used Lloyd Select Vehicles Lloyd Used Car Centre Vehicles

Automatic Used Cars  Manual Used Cars
 Petrol Used Cars  Diesel Used Cars 
 Electric Used Cars Hybrid Used Cars

When it comes to choosing a financing option for a used car, we’re here to help. At Lloyd Motor Group, our team are here to guide you throughout the used car buying process, and will help to find the right used car financing solution to suit you. Using the buttons below, you can find and contact your local Lloyd retail centre, or browse over 1,400 used cars available to finance, in stock and available to drive away today.

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Used Car Finance FAQs

How to get the best possible interest rate?
  1. Maintain a good credit score – aiming for a credit score above 700 will help to access the best rate.
  2. Consider your deposit and contract length – putting more money down upfront can reduce your monthly payments. A longer term can mean that you end up paying more interest overall.
  3. Improve your credit score before applying – Paying off existing debts and paying bills on time will improve your creditworthiness and demonstrate financial responsibility.
How many months can I finance a used car?

Car finance contracts can range from 12 to 60 months, although will typically be between three and four years. It can depend on what type of finance you choose. If you want to spread the cost of the car, you can choose a longer car finance agreement, which will mean smaller monthly payments over a longer period.

What do you need to finance a used car?

To make sure your application process is as smooth as possible, it’s handy to have ready:

  • Your personal information (name address, date of birth).

  • Driving licence or proof of identity.

  • Proof of income – Your employment status, where you work, job title and monthly income. Some lenders need paylips or bank statements as proof.

  • Your bank details.

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