Car Finance 101: The Simple Guide to Getting Your Dream Car on Finance

October 13th, 2025

Buying a car is exciting, but figuring out finance can feel overwhelming. That’s where this guide comes in.

We have broken down everything you need to know to get approved for car finance, avoid common mistakes, and drive away in the car you really want… without stress. Save this guide, share it with friends, and let’s get you on the road!

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Types of Car Finance

Hire Purchase (HP)

  • What it is: You pay a deposit, then monthly payments until the car is yours.
  • Pros: You own the car at the end; fixed monthly payments.
  • Cons: Higher monthly payments than some options; interest applies.
  • Best for: Those who want full ownership.

Personal Contract Purchase (PCP)

  • What it is: Lower monthly payments, with a final “balloon payment” if you want to own the car.
  • Pros: Lower monthly payments; flexible options at the end.
  • Cons: Mileage limits; you don’t own the car unless you pay the final amount.
  • Best for: People who like driving a new car every few years.

How To Get Approved

  • Step 1: Check your credit score
  • Step 2: Calculate your budget consider your monthly income, expenses, and how much you can comfortably spend on a car payment.
  • Step 3: Gather necessary documents (Proof of ID, Proof of Address & Proof of Income)
  • Step 4: Choose the right finance option (Hire Purchase or Personal Contract Purchase)
  • Step 5: Apply and compare lenders, we help throughout your whole sign up journey.
    We finalise and ensure dealership has the funds to release your car

Mistakes to Avoid

Buying a car on finance is exciting, but it’s also easy to make mistakes that could cost you thousands. Here’s what to watch out for:

1 – Overstretching Your Budget

It’s tempting to go for the car of your dreams, but only spend what you can comfortably afford. Include all monthly costs, like insurance, fuel, maintenance, and parking. A car that stretches your finances will cause stress, not freedom.

2 – Ignoring Hidden Fees and Extra Costs

Car finance isn’t just about monthly payments. Watch out for:

  • Arrangement fees
  • Interest rates that change over time
  • Early repayment penalties
  • Excess mileage charges (if you’re on a PCP or lease)

We ensure we provide you with a full breakdown of costs before you sign anything.

3 – Focusing Only on Monthly Payments

A low monthly payment might look attractive, but it could mean you end up paying much more in total interest. Don’t just ask, “Can I afford this monthly?” Ask, “What’s the total cost over the full term?”

Embrace Your Journey

By reading this guide, you now understand the basics of car finance.. from the different types of finance options to the steps to get approved, the mistakes to avoid, and tips to make smarter decisions. You’re in a much stronger position to find a deal that fits your budget and lifestyle.

Here’s why choosing us at NBA as your car finance broker is the smartest decision:

  • We Do the Hard Work for You – Finding the best finance deal can be confusing and time-consuming. We compare multiple lenders, terms, and rates on your behalf, so you don’t have to.
  • Tailored Advice, Not One-Size-Fits-All – Every budget, credit history, and car preference is different. We provide personalised solutions that match your unique situation, ensuring you get a deal that works for YOU. Whether it be a car, a motorhome, a camper van, a motorbike. We have lenders for all!
  • Save Time and Money – With our expertise, you can avoid costly mistakes, hidden fees, and unnecessary stress. Our clients often secure better deals than going direct to dealerships or banks.
  • Trusted Guidance Every Step of the Way – From understanding your options to finalising your agreement, we’re there to guide you. You’ll never feel left in the dark or overwhelmed.
  • Your Goals Are Our Priority – We care about more than just closing a deal. We care about helping you drive away happy, confident, and financially secure. Your satisfaction is our success.

To Conclude

Choosing the right broker can make your car buying experience smoother, faster, and more affordable. With us, you’re not just getting finance you’re getting support, expertise, and peace of mind.

So why wait? DM us on Instagram or book a consultation today, and let’s make sure you get your dream car on the best possible terms.

Remember: financing a car doesn’t have to be stressful. With the right knowledge, preparation, and guidance, you can confidently navigate the process and drive away in the car you want — without any nasty surprises.

Thank you for trusting NBA to help you understand car finance. Here’s to your next car and the journey ahead!