Top Car refinance Car finance providers in the UK

Your guide to trusted UK car finance providers

Buying a car is a major financial decision. The right finance can lower costs, reduce risk and keep you in control. We compare established UK providers, clarify jargon and help you choose the finance type that fits your budget and credit profile.

Understanding APR is about real pounds and pence, not just percentages.

Who should use this guide

If you are a UK driver comparing HP, PCP or car loans, have a tight monthly budget, or a less-than-perfect credit score, this guide is for you. It suits first-time buyers, upgraders, EV-curious shoppers and anyone seeking clear, impartial insight on major GB providers.

Key terms explained clearly

• Hire Purchase (HP): You pay a deposit, then fixed monthly repayments. You own the car after the final payment and option-to-purchase fee. No mileage limits. Suitable for keeping the car long term.
• Personal Contract Purchase (PCP): Lower monthly payments with a large optional final payment (balloon) to own the car. Alternatively, return the car or part-exchange. Mileage limits and condition terms apply.
• Personal Contract Hire (PCH): A lease. You never own the car. Pay a fixed monthly rental, return at term end. Mileage and condition rules apply. Good for predictable motoring and newer cars.
• Conditional Sale (CS): Similar to HP but ownership automatically transfers after the final payment without an extra fee.
• APR: The total yearly cost of borrowing including interest and most fees. Compare deals using representative APR, but your rate depends on credit and affordability.
• Deposit: Upfront payment that reduces how much you borrow. Some providers offer £0 deposit, but monthly costs will be higher.
• Balloon payment: Large optional final payment in PCP to own the vehicle. Declining cars with high mileage can create negative equity risk.
• Negative equity: When the car is worth less than the finance balance. Common if you exceed mileage, skip maintenance, or exit early.

If you want predictable ownership, HP is simpler. If you want flexibility, PCP may suit.

The standout providers at a glance

What this means for you

• Prefer in-dealer support and reliability? Black Horse and Santander are strong starting points.
• Need quick digital decisions? MotoNovo and Oodle stand out.
• Concerned about bad credit? First Response, CarFinance 247 and Zuto specialise here.
• Looking for a straightforward bank loan? M&S Bank and Tesco Bank provide fixed-rate loans.

Picking the right route for your budget

• Black Horse: Part of Lloyds Banking Group with HP, PCP and Lease Purchase. Strong dealer relationships and tools to compare quotes. Reliable support for new and used vehicles.
• Santander: Offers HP, PCP, PCH and Conditional Sale. Inclusive underwriting that can start at 0% deposit, delivered via a large UK dealer network.
• MotoNovo Finance: Digital-first HP, PCP and HP Balloon. Online applications, fast decisions, competitive pricing for fair to excellent credit.
• Oodle Car Finance: Digital HP, PCP and personal loans focusing on fair to good credit customers. Flexible deposits and a straightforward journey.
• Zuto: Broker-style access to HP and PCP for poor to excellent credit, with growing electric vehicle options and fully digital processing.
• CarFinance 247: Known for bad-credit friendly HP and PCP, £0 deposit options, quick approvals and access to a wide lender panel.
• First Response Finance: HP product with no deposit options targeting poor to fair credit, simple terms and fast online approval.
• M&S Bank: Personal car loans from £1,000 to £25,000, terms up to seven years, representative APRs around 6.9% to 14.9%, soft quotes and overpayment flexibility.
• Tesco Bank: Personal car loans from £1,000 to £35,000, terms up to ten years, representative APRs up to about 15.4%, fast decisions and potential Clubcard rate discounts.

Match the finance type to how long you plan to keep the car and how far you drive.

Costs, impacts and risks you should weigh

• Total cost: Compare APR, fees and any option-to-purchase amounts. A low monthly payment can still mean a higher overall cost.
• Depreciation: PCP buyers face valuation risk at term end. If market values fall, returning the car may be cheaper than paying the balloon.
• Mileage and condition: PCP and PCH include mileage limits and fair wear guidelines. Excesses add up quickly.
• Deposit planning: £0 deposit increases monthly costs and interest paid. Even a modest deposit can reduce total interest.
• Early settlement: You can usually settle early, but check for interest rebates and any fees. Consider the savings from overpayments.
• Insurance and maintenance: Budget for comprehensive cover, servicing and tyres. Some leases bundle maintenance for cost certainty.

Can you qualify

• Credit profile: Options exist from poor to excellent credit. Providers like First Response, Zuto and CarFinance 247 focus on inclusion. Strong credit widens choice and lowers APR.
• Income and affordability: Lenders assess income, essential outgoings and debt-to-income. Expect proof of income, UK residency and age 18+.
• Vehicle criteria: Age, mileage and value caps may apply, especially for PCP and HP Balloon products. EV finance may attract specific terms.
• Employment status: Full-time, part-time and self-employed can be eligible. Consistent income history strengthens applications.
• Deposit and term: Larger deposits and shorter terms reduce risk and can improve odds of approval.

A realistic budget and clean documentation often matter more than a perfect credit score.

Step-by-step to the right deal

1. Set your monthly budget and realistic deposit.
2. Check your credit file with free UK services.
3. Choose HP, PCP, PCH or loan based on needs.
4. Get soft quotes from two or three providers.
5. Compare APR, fees, mileage and settlement terms.
6. Confirm vehicle eligibility and total cost.
7. Submit documents and complete affordability checks.
8. Review the agreement carefully before signing.

Upsides and trade-offs

• HP: Clear path to ownership, no mileage caps, higher monthly cost than PCP.
• PCP: Lower monthly payments, flexible end options, mileage limits and balloon risk.
• PCH: Predictable motoring, no ownership risk, return only, charges for excess wear.
• Personal loans: Ownership from day one, no dealer restrictions, rates depend on credit and term length.

Look before you leap

• Read the representative example and assumptions behind the APR.
• Check excess mileage, damage charges and the vehicle return policy.
• Confirm fees: option-to-purchase, arrangement, documentation and late payment.
• Understand voluntary termination rights and early settlement rules.
• Verify whether payment holidays affect total interest and credit file.

Alternative paths worth considering

• Save and buy: Avoids interest but takes time and risks price inflation.
• Cheaper car or nearly-new: Lowers borrowing and insurance costs.
• Salary sacrifice EV: If available at work, can be tax-efficient for electric cars.
• Credit union loans: Community lending with fair rates and supportive underwriting.
• Manufacturer offers: Seasonal PCP or 0% HP can be competitive for new cars.

FAQs

What is the main difference between HP and PCP?

HP aims for ownership at the end with fixed payments. PCP offers lower monthly costs with a large optional final payment and the choice to return or part-exchange.

Can I get car finance with poor credit?

Yes. Providers like First Response, CarFinance 247 and Zuto focus on poor to fair credit. Approval depends on affordability, deposit and recent credit behaviour.

Is £0 deposit a good idea?

It can help you get on the road, but it increases monthly payments and total interest. If possible, pay a modest deposit to reduce overall costs.

Should I choose a personal loan instead of HP or PCP?

If you want ownership from day one and fewer vehicle restrictions, a bank loan from M&S Bank or Tesco Bank can work. Compare APR and total cost carefully.

How do mileage limits affect me?

Mileage caps apply to PCP and PCH. Exceeding the limit incurs per-mile charges. Estimate honestly up front to avoid end-of-term surprises.

Can I settle early or overpay?

Most lenders allow early settlement and overpayments. You may receive an interest rebate. Check your agreement for any fees or rules.

What to do next

• Shortlist two providers that match your credit and deposit.
• Get soft quotes and compare the total payable side by side.
• Read the small print on mileage, fees and settlement.
• Choose the deal that fits your budget and driving pattern, then proceed with a full application.

The best deal is the one you can comfortably afford for the full term.

Important information

This guide is general information, not financial advice. Products, rates and eligibility vary by provider, credit and vehicle. Always read the pre-contract credit information and seek regulated advice if you are unsure.