Car Finance vs Personal Loan. What’s the Difference?
Car finance is specifically designed for the purpose of purchasing a vehicle, while a personal loan can be used for a variety of expenses. Car finance often has more flexible terms than a personal loan, making it a better option for purchasing a car. Additionally, some car finance options allow the borrower to use the car as collateral, which can also lower the interest rate and increase the chances of approval.
Buying a car is a big investment and the decision of how to finance it can have a significant impact on your finances in the long term. While both car finance and personal loans offer different ways to pay for your car, it is important to understand the advantages and disadvantages of each option so you can make an informed decision.
Advantages of Car Finance:
Lower Monthly Payments: Car finance usually offers lower monthly payments than personal loans, making it more affordable for some people. This is because the loan is typically secured against the car, allowing the lender to spread the cost over a longer period.
Fixed Interest Rates: Many car finance deals come with fixed interest rates, meaning you know exactly what you’ll be paying each month and won't have to worry about fluctuations in interest rates.
Easy Process: The process of obtaining car finance is often straightforward and can be completed in a matter of minutes, making it a quick and convenient option.
Option to Trade-in: With car finance, you have the option to trade-in your old car for a new one when your finance deal ends. This can help reduce the cost of your next car.
Disadvantages of Personal Loans:
Higher Monthly Payments: Personal loans often have higher monthly payments than car finance, as the loan is typically paid back over a shorter period.
Higher Interest Rates: Interest rates on personal loans can be higher than those offered by car finance, so you may end up paying more in interest over the life of the loan.
Could not recommend Happy Motor Finance enough. Kirsty has been so helpful throughout, searching for cars and contacting dealerships on my behalf. She has gone above and beyond and made what could have been a stressful experience a walk in the park. Would definitely use again. Highly recommend
Brilliant service sorted everything for me
First class, quick and easy and extremely helpful from start to finish 👍🏼
Brilliant service from star to finish super fast on the forms and got my dream car ❤️
Excellent company highly recommend. Always available to help, brilliant communication and always kept informed of how the process was going. Swift, helpful and kind. Can’t wait to collect my new car. Thank you.
Fab from start to finish! Thank you so much! Can't wait to pick my car up! ❤️
Absolutely 110%.. Extremely helpful very fast replies.. Absolutely could not do enough for me.... Customer service is exactly how it should be... Amazing experience from the start to finish Thankyou
Easy and very helpful in finding the right car for me
Happy Motor Finance Limited is registered in England and Wales under company number: 14387669. Registered office address: Clippers House, Clippers Quay, Salford, England, M50 3XP
Happy Motor Finance Limited (FRN - 989250) is authorised and regulated by the Financial Conduct Authority. We act as a credit broker not a lender. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase. (Written Quotation available upon request). Whichever lender we introduce you to, we will typically receive commission from them (either a fixed fee or a fixed percentage of the amount you borrow) this will not affect the rate you are offered or the amount you will pay back. The lenders we work with could pay commission at different rates. All finance is subject to status and income. Terms and conditions apply. Applicants must be 18 years or over. We are only able to offer finance products from these providers.
Happy Motor Finance Limited are registered with the Information Commissioners Office under registration number: ZB408604