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9 car finance problems & how to solve them

problems with car finance

So, you’re looking to get finance on a new, nearly new or used car. While this is the ideal solution for many to get their next car, there are a few things you need to make sure you’ve considered first.

While affordability should be at the top of everyone’s list of things to think about, you could use our Apply Now feature, making it simple to find out if you’ll be accepted and how much you can afford before you pick one of our cars.

However, it’s also important to be informed before you take out car finance. That’s why we’ve put together a list of nine car finance problems and how to solve them, so you can feel confident in finding a funding solution to help you get behind the wheel of your new car.

1. Establishing the overall cost

It’s tempting when looking for your next car on finance to get side-tracked with all the options available. However, you must make sure you can afford it. Could your circumstances change in the future, and would this affect your ability to pay?

Establish how much you’ll be paying monthly and overall for your car, and make sure it fits your budget. If not, you could consider another option or look at ways to get a better deal – such as putting down a larger deposit or working on your credit score to bring down interest rates.

2. Researching your car and finance options

It’s not only your financial circumstances that can decide the car finance you choose. It’s also the kind of car you want and how you want to finance it.

Car Showroom

If you want a car that’s perfect for you, think about the type of car you need and how you plan to use it. Will the car be one you want to own at the end of your finance deal, or might your needs change?

If you’re after a modern, brand-new car, be aware that you may need to borrow more or find a larger deposit. However, with a newer model, you could be looking at lower maintenance and servicing costs.

Would you prefer to get a new car every few years, or is depreciation a concern for you? In that case, maybe leasing could be something to look into.

Make sure you do all your research and look around before settling on the car and the finance option that’s right for you.

Read: Car finance explained: What is it and how does it work?

3. Finding the best deal

Everyone has different circumstances, and when it comes to getting the best deal on car finance, you could feel bewildered by all the options out there.

Ultimately, it’s down to trust. While it’s more than possible that a new finance broker could offer a good lease deal, turning to one that has more experience or a larger panel of lenders to choose from may lead to a deal that is more suited to you.

Don’t get stuck with a car finance company with restricted lending options – either a small number of lending options or one that doesn’t suit your needs, as applying through the wrong lender can hurt your credit score.

Car Showroom

So it’s important to pick someone who will look at your individual circumstances and what you want out of the car finance, so they can tailor a solution for you and ensure you get the best deal.

Read: What is a credit broker and what should I look out for when buying a car?

4. New cars versus used cars

New car leasing or financing can be pretty straightforward, although when it comes to leasing, make sure the company has access to a good supply of new vehicles. Be wary if your car dealer or leasing broker seems to be pushing one model too much, as this can often indicate that they have got a job lot from somewhere or need to move less popular stock.

However, when it comes to used or nearly new vehicles, it’s different. You don’t want to get caught with a company that doesn’t have the capacity or the skills to prepare your vehicle properly.

Ideally, your dealer should be able to prepare the vehicles to an excellent standard and be able to handle everything from small hatchbacks with diamond cut alloys to vehicles with the latest hybrid and electric technology. Established franchise dealerships will offer this as well as finance and leasing brokers such as Hippo Motor Finance.

5. Deciding on a deposit

Pay special attention to how your deposit affects the headline price (this is the monthly price the leasing broker or finance company advertises the vehicle for).

Calculator And Toy Car

It’s easy to be enticed by an attractive monthly price, only to find out you have to pay an exorbitant initial rental. Small deposits are quite standard, but deposits in the hundreds or thousands of pounds range can be harmful down the line. If you don’t have the cash to fund a deposit, find a dealer with £0 deposit options.

6. Don’t feel you need to commit to a hard search

As previously stated, when it comes to car finance agreements, you need a big panel of proven lenders. Still, it’s also important to choose lenders that offer soft search capabilities so that there’s no chance of your credit rating being negatively impacted.

A soft search is not something all brokers can offer as it’s costly to implement behind the scenes. But a broker with your best interests at heart should be able to offer this service so that you don’t need to commit to a hard credit check that will impact your credit rating if you’re declined. Use our car finance eligibility checker to determine whether you’re preapproved for finance – it’s a soft search that won’t impact your credit score.

car finance eligibility checker

7. Know your warranty

Servicing Car

Does your car come with a warranty? New cars will obviously have the manufacturer’s warranty, but this isn’t the norm for used vehicles. Is the dealer or supplier confident enough in their vehicles to offer a complimentary warranty on the car? If not, consider looking elsewhere, as not having a warranty could cost you further down the line.

8. Potential penalties

Failure to stick to the terms of your agreement could end up costing you. Particularly with PCP or PCH agreements, be sure to know what you’re signing up for.

Excess mileage

While most of us have an idea of how many miles we will do, you never know what will happen – even a change in job location could mean you need more than the agreed number of miles on the contract.

The charges for excess mileage are normally between 4p and 15p per mile but can be as much as £1, leading to a nasty surprise when you return the car.

Damage to the car

While normal wear and tear are acceptable, the better condition you can keep the car in, the less you’ll end up having to pay out in the end.


Some contracts will stipulate when and where you need to get the car serviced. If it’s in your terms and conditions, it’s best to keep on top of it and avoid penalties.

9. The importance of aftersales care

Aftersales care can make all the difference – what happens when something goes wrong?

It’s better to deal with a company that has a reputation for great support after the car has been handed over.

Online recommendations are a good source of information when considering a car finance company and its aftersales service. They can help you make up your mind about the product, service and how a company performs after the sale. Look for established companies, like Hippo Motor Finance, part of Hippo Motor Group, with solid reviews.

When it comes to checks, you can find how long the company has been trading at Companies House or see if the Financial Conduct Authority regulates them.

If you want to investigate further, you can see if the business is affiliated with any associations, such as the BVRLA, the UK trade body for companies engaged in vehicle rental, leasing and fleet management.

A serious finance and leasing broker that you can trust will listen to your needs, ensuring that all bases are covered about the finance, vehicle, and supply professional solutions.

Don’t get caught out by car finance companies that don’t have your interests at heart; choose Hippo Motor Finance for a car finance experience that you can trust. Use our car finance eligibility checker to determine whether you’re preapproved for car finance.

car loan eligibility checker

Representative Example of Credit

We expect more than 51% of our customers to achieve this rate.

Loan Amount Total Cost of Credit Representative APR 60 Monthly Payments Deposit Amount Loan Term Total Amount Payable
£7,500 £3831 19.1% APR £188.85 £0 60 Months £11,331

All offers are subject to change at any time, you must be 18 or over and finance is subject to status, vehicle availability and terms and conditions apply. We can introduce you to a limited number of finance companies, a commission may be received. Failure to maintain payments may result in termination of your agreement and the vehicle being returned, this could affect your credit rating and make it more difficult to obtain credit in the future. All prices correct at time of publication.

We purchase a wide variety of vehicles from all over the country to ensure the best quality and value for our customers, all of our cars go through a thorough inspection process and if they do not meet our standards we do not sell them. We endeavour to inform our customers (where possible) the provenance of the vehicle they are buying and as such we will always inform you if the vehicle has previously been either an ex fleet or hire car. Should your vehicle be an ex hire/fleet car please do not be concerned as we would never value this vehicle differently when you come to part exchange it and there is no difference to the CAP valuation either.

You should try and estimate the distance you will travel as accurately as possible to try and avoid excess mileage charges at the end of your contract.

All pictures and/or photos and car descriptions on this site are for illustration and reference purposes only and are not necessarily the vehicle on offer. All offers are subject to change at any time and are subject to finance approval and vehicle availability. All prices correct at time of publication. E & OE.

Hippo Vehicle Solutions t/a Hippo Motor Finance is authorised and regulated by the Financial Conduct Authority. FRN 658076. We are a Credit Broker not a Lender and can introduce you to a limited number of lenders. Subject to status and to UK residents only (excl. the Channel Islands). Individuals must be 18 or over. Guarantees and indemnities may be required. We typically receive a fixed commission calculated by reference to the vehicle model, product or amount you borrow, for introducing you to a lender but this does not affect the interest charged on the agreement, all of which are set by the lender. Images for illustrative purposes only. Hippo Vehicle Solutions t/a Hippo Motor Finance is an Appointed Representative of AutoProtect (MBI) Limited for insurance distribution purposes. AutoProtect (MBI) Limited is authorised and regulated by the Financial Conduct Authority. Its firm reference number is 312143. You can check this at

We endeavour to ensure that all information including the specifications and finance availability are accurate. Whilst we make every effort to display correct information we are aware that errors may occur occasionally. We are not able, therefore, to guarantee the accuracy of all information especially when given to us by third parties. If you do require clarification of some information you have seen on our website, please email us at . This does not affect your statutory rights.

We are a broker not a lender and our registered office is Unit 26 Trident Park, Trident Way, Blackburn, BB13NU.