Top Reasons to Get a Car on Finance

Getting a car, whether it is new to use, brand new from the showroom, or one that has seen more miles than you have seen years alive, can be expensive. It’s not just the initial payment for the car either; you’ll need to have some extra cash for insurance, making some minor repairs (in the case of a secondhand car), and more. 

There are huge perks to opting for financing. In some cases, you can even trade in your current financed car for a new one. But what are the perks? 

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Large sums

Not everyone has thousands of spare cash sitting around that can be used on a car without a second thought. It takes months or even years to save enough money to buy a car outright. When you opt for finance, you will spread out payments over a longer period, and although they might be higher in the long run, they are more affordable overall. 

Credit score 

You can’t have a credit score if you don’t have credit. Whether you decide to finance your car with a personal loan or an HP contract, you’ll find that your credit score rises as you keep up your monthly payments. 

Financing a car will provide a fantastic opportunity to show that you can manage your credit wisely and adhere to repayment schedules as long as your payments are completed on time and none are missed.

By keeping up the payments, you can show future lenders that you are reliable and may get further credit. 


You don’t need to put anything up as collateral when you get your car finances. You are not at risk of losing your home or business if you don’t pay for the car. The reason is that the car itself will serve as collateral. If you miss payments or hit financially difficult times, you won’t lose anything other than the financed car. 

Better car

There is a lot to love about cars that have been around for a while and have some character. But newer cars are more reliable and less likely to cost a lot of cash in repairs. Paying in cash upfront means you can’t afford the better car – but with a financed car, you can. 

You’ll need to do some calculations here. Will buying a cheaper, older car that needs repairs in a year and replacing it in two be more or less costly in the end than having a newer car on finance? 


A financed car is perfect if you live and die by having a monthly budget. You will know exactly what you have to pay and when, and you will even see in your contract when those payments reduce at the end of the finance term. 

Always keep in mind that when taking finance of any kind, you need to keep up the repayments. We know that debt causes stress, and stress itself can impact your finances in a negative way, read more here: The Effects of Stress on Your Finances – Money Q&A

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