Used car finance typically carries a higher APR than new-car deals — expect roughly 9-15% APR on used HP or PCP versus 7-12% on new, since older cars are higher risk and depreciate less predictably. Most lenders won't finance cars over 10-15 years old or with very high mileage, and terms are usually capped at 3-5 years. Before signing anything, run an HPI/car history check (roughly £20-£30) to confirm the car isn't still owned by a previous finance company — buying a car with existing, undischarged finance on it is a real and common risk with used cars.
At a glance
| Factor | Typical used-car finance figure |
|---|---|
| APR range (2026) | 9-15%, higher for older/higher-mileage cars or weaker credit |
| Maximum car age at end of term | Usually 10-15 years, lender-dependent |
| Typical term | 2-5 years |
| Vehicle history check cost | £20-£30 for a full HPI-style report |
| Common finance types offered | HP most common; PCP and personal loans also available |
Why used car finance costs more
Lenders price risk into the APR, and used cars carry more of it: their future value is less predictable than a new model's, they're more likely to need repairs during the loan term, and buyers financing used cars statistically have a slightly higher default rate. The result is used-car APRs running a few points above equivalent new-car deals — commonly 9-15% versus 7-12% for new, though your own credit profile moves this more than the car's age does.
What lenders will and won't finance
Most mainstream lenders set an age limit on the car at the *end* of the finance term, commonly 10-15 years, and a mileage cap, often around 100,000-150,000 miles. Buy a car close to those limits and your term will likely be shortened to fit — a 12-year-old car might only get a 2-year loan rather than 5. Very cheap cars (under roughly £3,000-£4,000) can also be harder to finance since many lenders set a minimum loan size.
HP is the default; PCP and loans still work
Hire Purchase is the most commonly offered product on used cars because dealers can price it simply against the car's value, but PCP deals do exist on used stock, especially nearly-new "ex-demo" cars, and personal loans work identically regardless of the car's age since the lender isn't securing the loan against the vehicle at all.
The used-car-specific risk: existing finance on the car
Because a car under HP or PCP legally belongs to the finance company until the final payment, a private seller can — knowingly or not — try to sell a car that still has an outstanding finance agreement against it. Buying it doesn't automatically clear that debt: if the seller defaults, the finance company can in some circumstances repossess the car from you. A vehicle history check (HPI or equivalent, roughly £20-£30) reveals outstanding finance, previous write-off status, mileage discrepancies and stolen-vehicle markers before you commit.
Steps to take before financing a used car
- Run a vehicle history check to confirm no outstanding finance, write-off history, or mileage anomalies
- Get an eligibility (soft-search) quote from at least two lenders to compare APR before committing to the dealer's offer
- Check the maximum age/mileage the lender will finance to and ask how it affects your term length
- Ask for the total amount payable, not just the monthly figure, especially on PCP where a balloon is involved
- Confirm what happens if the car needs major repairs during the loan — you're still liable for payments regardless
Never skip the vehicle history check to save £20-£30 — a car with undischarged finance can legally be reclaimed from you even if you bought it in good faith from a private seller.
Frequently asked questions
Is used car finance more expensive than new car finance?
What's the oldest car I can get finance on?
Can I get PCP on a used car?
How do I check if a used car has outstanding finance?
What happens if I buy a car that still has finance owed on it?
Sources & further reading
- MoneyHelper — Car finance: HP and PCP agreements
- gov.uk — Buying a used car: your rights
- Which? — Used car finance guide
Figures, prices and policy details were current at the last-updated date above. Automotive pricing, incentives and regulations change frequently — verify time-sensitive details with the linked primary sources. Read our editorial policy and fact-checking standards.
