Call free on 0800 694 5566 Open 24 hours a day.


Can I buy a car with a loan?

Thinking of buying a car but unsure whether you can get a loan for the purchase? Find out more about the best option before you buy.

A car will be among the most important things you'll ever buy – not to mention, potentially one of the most expensive.

Whether buying new or used, it’s a big decision that will affect your finances for years to come.

If you need finance to help you to buy your car, there’s a range of options available. However, as a type of loan you’re still liable for taking on the debt and should be sure you can afford to make repayments.

Can I buy a car with a loan?

Yes, you can buy a car with a loan. If you aren't in a position to pay cash for your car, it is still possible for you to raise the funds to buy a car by taking out a loan.

There are various options available when it comes to car finance, but you should keep in mind the size of this financial commitment. You should only borrow what you can afford to repay, and remember there will be interest charges added to your repayments.

What you'll need to do is figure out what finance option is suitable for you, and what will be more manageable.

Car financing options

If you're looking to purchase a new or used car and can't afford to buy with cash, you'll need to look into your financing options.

There are two main ways of raising the money to buy a car. These are taking out car finance and the alternative of taking out a personal loan.

Car finance (HP, PCP)

You can take out specific car finance with manufacturers and dealers to cover the cost of the vehicle. These options differ from one another, and some may not suit your circumstances.

Two forms of car finance are hire purchase (HP) and personal contract purchase (PCP). With a hire purchase, you secure the loan against the car and pay a deposit of around 10%. After this, you will then make fixed monthly payments over a period of time - once the amount is repaid you own the car.

A personal contract purchase is a little more complicated. The monthly payments are usually much lower than a hire purchase. That’s because the loan amount is for the difference between the predicted final value of the car and its price when it was brand new. It's best described as a form of long-term rental. When you reach the end of the contract term, you can do one of three things:

Personal loan

With some forms of car finance, you’d deal direct with the car seller. But alternatively, you could look to raise the money for buying a car by taking out a personal loan, and paying with the proceeds.

If you have a good credit rating, you will be able to explore this route. With a personal loan, you will essentially become an outright cash buyer of the vehicle from the dealer or manufacturer. You can then spread the cost over a period of time with your lender and pay them back.

Car finance vs personal loan

To help you discover the best finance option to purchase your car, we've put together the pros and cons of car finance and personal loans.

Car finance



Personal loan



Choosing to buy a car is an important decision and one that needs care and consideration. Therefore selecting your best-suited finance option is also a fundamental part of the process as this will be a long-term commitment. If you're shopping around for a new vehicle and have decided a loan best suits your requirements, head to our loans page to find the right option for you.


For your FREE, no-obligation quote

Get a Quote Now

Alternatively, call FREE on 0800 694 5566 Open 24 hours a day.


Featured Articles

2020 Platinum Feefo Trusted Service Award

Call us FREE on 0800 694 5566

24 hours a day, 7 days a week.

Complete our quick online form.

Get a Quote Now