Used car finance

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Say goodbye to uncertainty and hello to car-buying confidence. Sort your used car finance with Oodle and drive away safe, knowing that you’ve got the used car you want within a budget that suits you.

Representative 14.7% APR

How does used car finance work?

Car finance is a cost-effective way to purchase a used car. With used car finance, you can borrow money from a lender to cover the cost of the vehicle and then repay it in affordable monthly instalments. This allows you to enjoy the benefits of driving a used car while managing your expenses effectively.

Buying a second-hand car is a smart choice for many people because it’s more affordable than a new one and tends to lose value more slowly over time. If you’re interested in buying a used car but would prefer to spread the cost, financing options could be your ideal solution.

Are you a first-time car buyer? Read our guide to buying a used car.

Is used car finance right for you?

Whether or not used car finance is the right thing for you will depend on your own personal financial situation and on your preferences.

Used car finance is a popular choice for thousands of motorists. Although used cars are more affordable than brand-new cars, buying any vehicle is still an expensive business. If you don’t have the cash ready to buy a car outright, or you don’t want to exhaust all your savings, then buying a good quality second-hand car with a finance agreement can help to make this sizeable purchase a reality.

By spreading out the cost of the car into manageable monthly payments, many drivers find they can afford to buy a higher-spec vehicle than they otherwise would have had access to.

How does used car finance work?

Are you a first-time car buyer? Read our guide to buying a used car.

Types of used car finance

Typically, there are a few ways to buy a used car. Each option comes with its own advantages and disadvantages. The best choice for your second-hand car finance will depend on your circumstances.

Car loan

A car loan, sometimes called an Unsecured Personal Loan (UPL), is a financing option where you borrow a lump sum of money to buy a used car and repay it through monthly instalments, but you’ll own the vehicle from the start. While no upfront deposit is required, it’s important to note that the interest rate and monthly payments can be higher than with other car finance options, depending on your credit score.

Hire purchase

Hire purchase (HP) is where you make a regular monthly payment for a used car with a fixed interest rate – meaning you know exactly how much you are paying every month. The deposit can be flexible or even not required at all. The car is owned by the lender until you pay the last monthly instalment and the option to purchase fee.

Personal contract purchase

Personal contract purchase (PCP) allows you to buy a used car through fixed monthly instalments, like hire purchase. PCP tends to have lower monthly payments as you don't have to pay the car's total value. But should you decide to keep the car at the end of the agreement you will need to pay a substantial ‘balloon payment’ to purchase it outright.

Personal contract hire

Personal Contract Hire (PCH) is a flexible leasing option that lets you hire a used car for a fixed term with manageable monthly payments and an upfront rental fee. You get full use of the vehicle during the lease, but keep in mind you'll be responsible for upkeep costs. You then return it at the end - there’s no option to buy, making it ideal if you prefer driving the latest models without long-term ownership.

How used car loans work

Whether you're upgrading your current vehicle, switching to a more efficient model, or looking for something with extra space, an Oodle Car Loan could help you spread the cost of a used car

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You’ll have your money in your account the next working day

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Buy the vehicle that suits you best, wherever you find it

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Representative 14.7% APR

Calculate monthly used car finance payments

The world of car finance can be a confusing one – but we’re here to help simplify things. Use our car finance calculator to help you decide whether car finance could be a good option for you, without affecting your credit rating. The calculator will give you a good idea of what your monthly payments could look like based on how much you’re looking to borrow.

Don’t worry, you’re not committing to anything; this tool is simply a useful guide to help you figure out a budget that suits you best before you complete a full application for car finance.

FAQs about used car finance

Is used car finance cheaper overall?

Put simply, a used car will be cheaper to finance than buying the same car brand new because you are borrowing less. Second-hand cars will depreciate more slowly than new vehicles, which can also help to reduce the overall cost of financing. Used car finance can help you access vehicles that might otherwise be out of reach by spreading the cost over time. However, you’ll pay interest on the loan, which is influenced by factors such as your credit score, the length of the agreement, and the type of finance you choose—so it’s important to consider the total cost before committing.

Is it worth financing a used car?

Whether or not financing a used car is right for you depends on your own financial situation. Financing can be a great way of getting a car without having to pay the full cost upfront. But there are some important considerations to take into account before deciding to go ahead with a car finance agreement: for example, the interest rate and APR of the agreement, and your current credit score (which can impact whether you’ll be offered car finance in the first place).

Before applying, it’s important to set a clear budget and understand what your monthly payments might look like. Our car finance calculator can help you explore your options and see if car finance is right for you - without committing to anything.

What do you need to finance a used car?

When you apply for used car finance, most lenders will carry out credit and eligibility checks to determine if they can offer you a finance agreement. You may need documents to prove to the lender that the information you provided in your application was accurate - although lenders can complete these checks automatically in many cases. The information required may include:

Proof of identity – All applicants must be aged 18 or over.
Proof of address – Address history from the past three years.
Proof of earnings – This could include personal income, and household income if you have dependents such as children.
Employment information – Details about your current job, including your role and how long you’ve been employed.

How long can I finance a used car?

The length of time it takes to pay back the car could be different depending on your agreement with the finance provider who covers the initial cost. This flexibility allows you to negotiate a repayment plan that suits your needs. At Oodle, we offer agreements between 1 and 5 years.

What credit score is needed for a used car finance agreement?

Car finance companies want to know your credit history to evaluate how likely you are to pay the instalments for your car and to decide whether to approve your finance application. Generally speaking, higher credit scores typically lead to lower interest rates, which means having a higher credit score increases your chance of getting approved for finance with more favourable interest rates.

Find out more about credit scores.

What is APR?

APR (Annual Percentage Rate) is a calculation that allows you to understand the total cost of borrowing over a year. It’s a percentage of the money you’ve borrowed that includes the interest rate and any fees attached to the loan; it’s a helpful way to compare the total cost of different loans.

There are a number of factors that a lender will take into account when calculating your APR, but generally, the better your credit rating, the lower your APR will be. A lower APR means a lower interest rate, which will reduce your monthly payments.

What is APR?

APR (or annual percentage rate) is an important number to look at when purchasing a car with finance. APR is the total amount you borrow to buy the car.

The exact way your monthly payments are calculated may vary by lender. Roughly, your monthly payments are made up of the total amount you borrow, plus the interest, divided by the number of months in your loan term. There may also be one-off fees at the start or end of your agreement. The total amount of interest that you pay across the life of the loan will always be shown as an APR - this is to make it easy to compare offers across different lenders.

Representative Example: Borrowing £10,000 over 60 months with a fixed interest rate of {interestRate}% per annum and a representative APR of {apr}%, your monthly repayment would be £{monthlyPayment}. The first payment would be £{firstPayment}, which includes a £50 opening fee. The total cost of credit would be £{totalCostOfCredit}, making the total amount payable £{totalAmountPayable}. The representative APR includes all interest and fees.

What’s the oldest used car I can finance?

Every finance provider has their own criteria when it comes to the oldest used car they’re willing to finance. Some won’t approve loans for vehicles older than ten years, but others may consider cars well over that. Lenders will also consider the age of the vehicle at the end of the agreement so the length of the agreement may also be a factor. With an unsecured personal loan the money is yours - giving you the freedom to choose the vehicle that suits you best, no matter its age.

What’s the oldest used car I can finance?

Every finance provider has their own criteria when it comes to the oldest used car they’re willing to finance. Many won’t approve loans for vehicles older than eight years, but others may consider cars that are well over ten years old. Lenders will also consider the age of the vehicle at the end of the agreement so the length of the agreement may also be a factor. With an unsecured personal loan the money is yours - giving you the freedom to choose the vehicle that suits you best, no matter its age.

Can I get used car finance with bad credit?

You don’t necessarily have to have a good credit score to be approved for used car finance – but it helps! Some lenders are willing to help borrowers with a poor credit score, and a few even specialise in poor credit history finance.

So, if your credit score isn’t great, it doesn’t necessarily mean that you won’t be able to finance your car. It just means that you might have to shop around to find the right lender for you. Keep in mind that borrowing with bad credit may come with higher interest rates and monthly payments, so the overall cost of finance could be more.

Be careful though: if you’re struggling to pay off your existing debts it’s always best to get on top of these first before borrowing more. Talk to your lenders to make a plan to get your finances back on track. This will help to improve your credit score.

There are charities and organisations who can offer advice, help and support if you're in difficult circumstances. Find out more here.