Buying a used car with a loan: everything you need to know

If you’re thinking about how to finance a used car in the UK, a used car loan could be a smart and flexible option. Whether you’ve found a great deal at a local dealership or are buying from a private seller, spreading the cost with a personal loan can help you get behind the wheel without draining your savings.

In this guide, we’ll cover everything you need to know about buying a used car with a loan - from how used car finance works to the key checks to make before purchasing.

Why finance a used car with a loan?

Used car finance lets you borrow the money you need to buy a second-hand car, then repay it in fixed monthly instalments over a set term.

Unlike other car finance options like PCP or hire purchase, a personal loan means you own the car outright from day one.

The benefits of using a loan to buy a used car

• Fixed monthly repayments to make budgeting easier
• Competitive rates compared to some dealer finance plans
• Flexibility to buy from any seller - dealer or private
• No mileage restrictions or large balloon payments
  
  

What is a used car loan?

A used car loan is usually a type of unsecured personal loan. This means you don’t need to use the vehicle or any other asset as security. With Novuna Personal Finance, you can borrow between £1,000 and £35,000 over a term of 2 to 7 years, with fixed interest rates that stay the same throughout.

How it works:

What to check before buying a used car

When financing a used car, it’s important to be confident in the vehicle’s condition and value. Whether you're buying from a dealer or a private seller, take time to check the following:

Vehicle checks:

• Take it for a test drive to make sure it runs smoothly
• Inspect tyres, bodywork, lights, and dashboard warnings
• Confirm the MOT history and regular servicing
• Run a vehicle history check for theft, write-offs or outstanding finance

Price comparison:

• Compare prices on platforms like AutoTrader, Parkers or What Car?
• Be wary of offers that seem too good to be true
  
  

How to apply for a used car loan

Applying for a used car loan is quick and simple with Novuna. Once approved, you’ll have the money ready to secure the car you want — giving you more flexibility and buying power.

Things to consider:

• Loan amount - include the car’s cost and any extras like insurance or servicing
• Repayment term - a longer term means lower monthly payments, but more interest overall
• Monthly budget - make sure repayments fit comfortably with your other expenses

With Novuna, there are no hidden fees and you’ll know exactly what you’re paying from the start.

Can I buy a used car from a private seller?

Yes. One of the biggest advantages of a personal loan is that it gives you the freedom to buy from any seller, not just dealerships. 

That means you can shop around, compare deals, and negotiate the best price - all with the money already in your account.

Common questions about used car loans

Can I apply for a used car loan online?
Yes - it only takes a few minutes to apply online with Novuna.

Is a personal loan better than dealer finance?
Personal loans often offer more transparency and better value, plus you own the car outright from the beginning.

Can I buy a car from a private seller using a loan?
Absolutely. You’re free to buy from any private seller or dealership.

Is a used car loan right for you?

If you’re looking for a straightforward way to buy a second-hand car without paying upfront, a used car loan could be ideal. You’ll get clear repayment terms, full vehicle ownership from the start, and the freedom to buy the car you really want.

Ready to get started? Get a quote today and see how easy it is to finance your next car with Novuna Personal Finance.

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