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14 benefits of buying a car on finance

benefits of buying a car on finance

Buying or leasing a car on finance is a great way to drive the vehicle you want without the worry. 

There are pros and cons in doing so, and in this article, we’re going to explain 13 benefits of buying a car on finance. 

Firstly, though, what is car finance?

What is car finance? 

Car finance is a way of getting behind the wheel of the car you want by paying fixed monthly payments. 

It comes in several different forms, although the three most common are personal contract hire (PCH or lease), personal contract purchase (PCP) and hire purchase (HP). 

You can read more about car finance and decide which type suits your circumstances by clicking the link below.

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

Benefits of buying a car on finance

When you buy or lease a car on finance, you get to enjoy a whole host of advantages:

1. You know what you’re paying

Your payments are fixed with a car finance agreement, and your agreement lasts for how long you want it to. Therefore, you always know how much you need to pay and when you’ll be paying it. 

There are no surprise costs or fees, and if you include maintenance costs in your agreement – which you can do with some lease deals – you can take to the road with complete peace of mind, knowing everything is already paid for. 

2. You don’t have to pay a deposit

All the vehicles we offer come with a £0 deposit option. That means, if you don’t want to or can’t pay a deposit, there’s no pressure for you to do so. 

3. You can get car finance with less than perfect credit

You don’t have to have excellent credit to get car finance. Whereas if you applied for a personal loan, you might get turned down by the bank, there’s more chance you’ll get accepted for car finance.

pros of financing a car

We work with many bad credit lenders who help those with less than perfect credit. And we have a great track record in securing car finance agreements for customers with bad credit. 

Read: How to qualify for a car loan with bad credit

4. You can build your credit score

If you have bad credit or a less than perfect score, buying a car on finance is a great way to improve your credit rating. 

By keeping up with your monthly payments, you’re proving to future lenders that you can pay your loan back. 

In the future, that usually means that you’ll be accepted by more lenders, meaning your monthly payments will be lower. 

5. You can use any savings or cash for other purchases

By buying a car on finance, you can keep any savings you have for other purchases. 

That might be making home improvements or treating yourself to a well-deserved trip away.

Another option is to invest your savings or cash to accumulate interest so you can enjoy it more later down the line.

6. No need to pay a cash lump sum

As the cost of your vehicle is spread over fixed monthly payments, there’s no cash lump sum to pay. 

That means that you don’t need access to thousands of pounds. And even if you do have the money, you can save it for something else. 

7. You can part-exchange your current car

With any of our finance agreements, you can part-exchange your current car. That means you don’t have to worry about the hassle of getting rid of it privately. 

Read: What is part exchange on a car and is it worth it?

8. No worries about selling your car on

Whether it’s your current vehicle or your new one, when you buy a car on finance, there’s no worry about what you do with it after your agreement ends. 

Depending on the type of finance you choose, you can either part exchange the car for another one, hand the car back and walk away, or keep the car as your own. 

9. You can use your car as a deposit on a new one

If there’s any equity in your car when you decide to trade it in – where your car is worth more than any outstanding finance – you can use that as a deposit to lower your monthly payments on a new one. 

10. Get a better car

If you decide to buy your car on finance, you can usually get a better car than would usually be available if you decided to buy it with cash. 

advantages of financing a car

That’s because with most finance deals you’re only even covering the cost of a part of the car, and even a top-of-the-range model can come with low monthly payments. 

Read: 13 tips for buying a new car and getting the best finance deal

11. More security when buying through car finance

If you decide to buy the car outright through a personal loan or with savings, you’re entirely responsible for the vehicle and any costs you may face in the future. 

Whereas if you buy using car finance, there’s more security. 

For example, if you add maintenance to your finance agreement, there’s no need to worry about servicing, MOTs and tyres. 

12. More flexibility than buying with cash

When you buy a car through finance you have more flexibility than when you do with cash. 

That’s because, depending on the type of finance you choose, you can either hand the car back, part exchange it for another or keep it.

Read: What is the best way to buy a new car?

13. Change your car more frequently

When you buy a car on finance, it allows you to change your vehicle more frequently. 

That means you can enjoy a new car every few years and stay up to date with the latest styling and technology. 

With a newer car, it also means there’s less to worry about with reliability and fuel economy- so it’s cheaper to run. 

Happy In New Car

14. You can check your eligibility before you buy your car

Some dealers or brokers won’t offer this option; they’ll take you straight into a hard search. If you have good credit, you might not be too concerned about this, but if you’re unsure, you should find a dealer who does a soft search first. A soft search gives an idea of whether you’re likely to be accepted for finance, which poses less risk. A soft search won’t harm your credit score, either.

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.