Car finance calculator

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Amount to borrow:
To repay over:
5 Years
Car finance rate XX% APR
Cost of credit £ XXX
Total repayment £ XX,XX.XX
48 monthly payments of
£ 245 /mo

Representative example - Borrowing £5,500 over 4 years with a representative APR of 19.8%, and a deposit of £0, the amount payable would be £162 per month, with a total cost of credit of £2,282 and a total amount payable of £7,782.

Carplus will find the best car loan rate from our panel of lenders and will offer you the best possible deal. We don’t charge fees, but we earn a commission. This does not influence the APR you’re offered in any way.

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According to press reports and market research from industry analysts such as the Society of Motor Manufacturers and Traders (SMMT), the majority of buyers use some form of car finance when purchasing a car.

Nine times out of ten, getting a car loan to finance your purchase is perfectly straight forward.

There are occasions, though, when it might be a little more complicated. And one of those is when you need what is commonly called negative equity finance.

What is negative equity?

If you used car finance for the purchase of your current car, it is possible that the vehicle is now worth less than the amount still outstanding on the original loan. The car might have been involved in an accident, for example, or its value might have dropped because it has depreciated at a faster rate than you had imagined.

Either way, you might be in some difficulty if you want to sell the vehicle now and replace it with another — the proceeds from the sale are insufficient to pay off the original loan and you are still left with the outstanding balance to pay. How does that affect your ability to raise further personal loan car finance in order to buy your new vehicle?

Negative equity finance

That is where our ability here at CarFinance Plus to raise negative equity car finance on your behalf comes in.

It gets its name from the fact that, when you trade in your current vehicle in part exchange for a new one, we are able to raise sufficient finance to allow both needs to be met. Namely:

  • to pay off the outstanding balance on your original car finance; and
  • to finance the purchase of your replacement new or used car.

How it works

Provided you current car is accepted by a dealer in part exchange for a new purchase, the finance we arrange on your behalf is automatically used to clear your outstanding debt and paid to the dealer for the new or used car you are intending to buy.

Whether this is a solution which works for you depends on a number of factors, chiefly including:

  • the amount of negative equity — in other words, the amount of the outstanding debt on your original loan when your current car is accepted in part exchange;
  • the amount you are paying for the vehicle you now want to buy; and
  • the value placed on that new car by the finance company — and if that is higher than the asking price, the finance company may sometimes be prepared to lend more than the dealer needs you to pay.

Naturally, there is a limit to the amount of negative equity which may be cleared in this way and, with the above factors all in your favour, we may be able to settle as much as £1,000 in the outstanding debt on your current vehicle once it has been traded in.

Clearly, as big a deposit as you are able to manage on the new purchase increases your chances of success. You also need to demonstrate a clean record on some form of existing credit, are currently in employment in the UK, and have a UK driving licence.

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