FAQs

Understanding all the aspects of Car Finance can be confusing. At CarFinanceChecker we aim to make it clearer by trying to break down all the relevant components with this FAQ section.

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1. How accurate is the service?

We believe that the Low and High matches are the most accurate. Where the deal is classed as a Medium eligibility match then there is nothing fundamentally wrong but the deal hasn't necessarily hit all the 'trigger' points to allow us to make a definitive yes. The two big factors that can assist this are a reduced term and/or an increased deposit.

2. How do you use my data within the process?

Your personal data is used to ascertain the eligibility match. In addition to this, we use the vehicle details, the amount you want to borrow against the vehicle (known as the ‘Loan to Value’) and then the term you wish to borrow the money over. All this data is used by lenders within their underwriting processes and we try to emulate this.

3. Why do results sometimes change when I alter the deposit or term?

The less you want to borrow versus the vehicle’s value, the better. In essence the finance company takes its security in the vehicle, but as we all know vehicles depreciate so if the agreement is to be repaid over a shorter term then the amount outstanding is more likely to stay ahead of the depreciation curve. So simply putting in more deposit or reducing the term will increase the likelihood of approval.

4. Will I get a different result on another vehicle?

It depends! The vehicle age, the amount you want to borrow and the loan to value percentage all impact on the lenders underwriting appetite. If however, you are looking at virtually the same car, price, age over the same term and deposit then no.

Motor finance lenders have a good understanding of the car market so they typically lend much more than Banks and other personal loan providers. Personal loan providers typically lend up to £15,000 or £25,000.

If you are looking for more than this, then motor finance is a good way to source your finance, as some will lend significantly more. Within CarFinanceChecker.com we look to implement these rules where known.

If you choose to apply for a finance product then the underwriting process is usually very quick. Your dealer will normally get an answer within a couple of hours and some providers will even provide an instant decision.

5. What does 'Leaving a footprint on my file' mean?

In order for CarFinanceChecker to establish your eligibility match we carry out what is known as a 'Quotation Search' with Equifax, a Credit Reference Agency.

This search will only be visible to you, assuming you choose to obtain your credit file from any of the three UK credit reference agencies. This is often referred to as a 'soft footprint' but as lenders cannot see it, your ability to gain credit is not impacted at all.

If you choose to apply for finance then the lender will carry out what's known as a 'Credit Application' search which is visible to other lenders. Too many of these are likely to impact on your credit rating as they can reduce you credit score. This is why CarFinanceChecker is so beneficial, as we look to find the right match before you 'officially' apply.

6. How secure is the site?

We take a great deal of care in protecting your data. The pages of the site that collect your data are secured using the latest Extended Validation Security Certificates. These 2048 bit SSL Certificates provide the highest levels of security and is the reason why the address bar in your browser should be green when you link through to the page from the dealer's website.

7. Do you pass my credit file to the dealer?

No. We don't pass any details of your credit file to the dealer or anyone else. What we do pass to them is your vehicle and enquiry details along with your eligibility match. This then ensures that the dealer knows which of it lender's you are most suited for, assuming you choose to proceed with the car purchase. We also believe that dealers will treat your enquiry as a priority on the basis you've taken the time to go through the process.

8. Is CarFinanceChecker.com regulated?

Yes. CarFinanceChecker.com is a trading style of iVendi Limited who is Authorised and Regulated by the Financial Conduct Authority. Our Firm Reference Number is 0651102.

9. What is HP or Hire Purchase?

HP or Hire Purchase is technically a hire agreement with an option to purchase. This means the finance company owns the vehicle until you repay the agreement. There is often a fee known as the 'Option to Purchase' fee which when paid, transfers title to you. In terms of general day to day matters you are still classed as the 'owner' for the purposes of insurance companies and when registering the vehicle, paying road fund licence etc. Interest is normally charged on the agreement and payments spread over terms ranging from 12 to 60 months. Check out our videos below for more information.

10. What is CS or Conditional Sale?

Conditional Sale is very similar to Hire Purchase in that the vehicle is ‘hired’ until all the conditions of repayment are met. When all the repayments have been made then title transfers from the lender to the customer.

11. What is PCP or Personal Contract Purchase?

Personal Contract Purchase or PCP is a form of HP (Hire Purchase), however the key difference is that an estimated future value is calculated and deferred to the end of the agreement. This means that your regular monthly payments are lower than those on a HP agreement over the same term.

The future value is based on the age and mileage of the vehicle at the end of the term and this amount is guaranteed by the finance company, subject to you looking after the vehicle and maintaining it. This means you can hand it back to them at the end of the agreement with nothing more to pay. Check the terms and conditions as each lender's PCP product has its own rules. If you want to hand it back and have exceeded the annual mileage you will need to pay an excess mileage charge. However, the hand back option is generally not used as most people simply part exchange their vehicle and use any excess value between the vehicles worth and the settlement figure, as deposit for their next car. You can settle the agreement at anytime and will receive a rebate of interest charges. Our video below will provide you with additional information.

12. What is LP or Low Payment Plan?

Lease Purchase/Low Payment Plan or Balloon HP is a form of Hire Purchase but with a sum deferred to the end of the agreement which is often referred to as a 'balloon payment' or 'Residual Value'.

The amount deferred is based on the age and mileage of the vehicle at the end of the agreement. This lowers the regular monthly payment when compared to an equivalent HP agreement over the same term, however the final payment is not guaranteed (like it is with a PCP). Some lenders don't want to guarantee the future value so use Lease Purchase as an alternative. Others use it to provide higher residual values to create lower monthly payment but remember the risk sits with you, the customer. If the amount due at the end of the agreement is more than the value of the vehicle then the customer must pay the difference.

Product Videos

 

Hire Purchase

 

Low Payment Plan or Lease Purchase

 

Personal Contract Purchase