Close Brothers offer car finance for both new and used cars, vans and motorbikes across the UK. If you've taken out a car finance policy, you too can leave a...
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Find the top car insurance productsFrequently asked questions
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What is car finance?
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Car finance is an agreement that allows you to buy or lease a car and repay the borrowed money over a set period of time. The most common types of car finance are Hire Purchase (HP), Personal Contract Purchase (PCP) and Personal Contract Hire (PCH).
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How does car finance work?
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Car finance is an alternative to buying a car outright which can be expensive. With car finance, you borrow money from a lender to buy or lease a car and agree to repay the amount with interest over a set period, usually 3-5 years. You can pay an initial deposit to lower the amount you borrow and decrease your monthly payments. Depending on your finance type, once your repayment period ends you'll either own your vehicle, make a balloon payment to buy it or you can return the vehicle to the lender.
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Does car finance affect your credit score?
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Yes, buying or leasing using car finance will impact your credit score. During the application process, the lender will run a 'hard check' on you, which will leave a mark on your credit report. But, as long as you stay on top of repayments and settle the amount in full, the overall effect on your credit score should be positive.
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