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Car Finance FAQs

Before you apply

Applying for car finance

  • To apply for car finance, you must:

    • be 18 or over
    • be a UK resident
    • be registered for online banking
    • have held a Halifax personal current account for a minimum of three months.

    You can apply for car finance if you’re buying a new or used car from a selected dealership. Lending is subject to status and additional affordability checks.

    • Log in to use the personalised car finance calculator. This will help you to compare finance options and work out how much you can afford to borrow.
    • Shop around to find the car you want. Browse our list of approved dealerships or use the ‘Find dealer’ option in online banking.
    • To make an application we’ll need details about the car you’ve chosen, and dealership you want to buy from.
    • We’ll then complete an affordability assessment. If we accept your application, we’ll hold your finance offer open for up to 90 days.
    • Finally, when you’re ready to complete the finance agreement, you’ll need to enter the bank details of the dealership you’re using. We’ll then pay the dealership direct.

  • Before you apply, you’ll need:

    • to find the car you want to buy
    • to know the car’s registration number
    • to know the current mileage and give an estimate about your annual usage
    • to tell us the price of the car and the amount of any deposit paid
    • the car dealer’s name, postcode and bank account details.

    We’ll also ask for information about your income and any existing financial commitments.

    If applying for a new car.

    You’ll also need to know the delivery date of your car and the full vehicle details, if you don’t know the registration number yet.

    If applying to refinance with us.

    You’ll also need your current dealer’s name, postcode and bank account details. Along with your settlement figure and the name of your current finance provider.

  • No. Halifax Car Finance is only available to existing customers who apply through online banking.

  • Yes, if you meet our criteria, you can apply for car finance from a joint account online.

    We’ll register the application against the person logged in to online banking. The car finance agreement will be in one name only and can only be administered by that customer.

    Application tips:

    • Make sure your answers reflect your individual circumstances.
    • When entering income, it’s your personal income not the full household income.
    • Your outgoings should be your contribution to the household costs.

Understanding your options

  • Extra protection

    If you use Car Finance instead of an unsecured personal loan to buy your car you’ll benefit from extra consumer protection. The consumer rights act applies which means the finance company has responsibility for the quality of the goods and to resolve any issues with the dealership if they are not of the required standard.

    Voluntary termination rights

    Under the Consumer Credit Act 1974 you have a right to end any regulated Hire Purchase (HP) or Personal Contract Purchase (PCP) agreement at any time before the final repayment under your agreement, becomes due. This is known as voluntary termination and is detailed in the ‘Termination: Your Rights’ section on your credit agreement.

    You also have the option to voluntary terminate your agreement. You will need to return the car and half of the total amount payable as detailed on your agreement documentation. If you have already paid at least this amount plus any overdue repayments and have taken reasonable care of the car, you will not have to pay any more.

    Secured lending

    The car finance lender buys the car on your behalf and owns the car for the duration of the finance agreement, so if payments aren't kept up, the car can be repossessed. For unsecured personal loans the lender loans you the money directly and does not own the car.

    Car finance (PCP or HP options)

    Car ownership - Don’t own car until final payment
    Loan purpose - Can only use to purchase car
    Deposit required to take finance out - Typically yes
    Extra protection - Yes – protection under the consumer rights act if something goes wrong and the right to terminate your regulated agreement under the Consumer Credit Act 1974

    Unsecured personal loan

    Car ownership - Own the car as soon as you purchase
    Loan purpose - Could use for other purposes as well as car purchase
    Deposit required to take finance out - No
    Extra protection - No

    Learn more about our personal loans.

  • APR stands for Annual Percentage Rate and is the amount of interest on your total borrowed amount that you'll pay annually (averaged over the full term of the loan).

    APR’s are typically used when comparing finance options to understand which would be the cheapest option overall.

  • The lump-sum is a one-off optional payment due at the end of your (PCP) finance term, if you decide to keep the car.

    This is normally referred to as the Guaranteed Future Value (GFV) and is an estimated value of how much the car will be worth at the end of a finance agreement (based on your expected mileage and agreement term). The GFV is only applicable if you intend to hand the car back at the end of the agreement as part of the goods return option.

    There’s no lump sum payment on the Hire Purchase (HP) finance option, which is why monthly payments are usually higher than with the Personal Contract Purchase (PCP) option.

  • Your deposit is the amount of money you have available to pay the dealership upfront and could include savings and/ or the value of a current vehicle. For example:

    1. Mr Jones is coming to the end of a 3 year existing Car Finance agreement, which is a PCP deal and wants to buy a different car. He has his eye on a car being sold at £13,200. His local dealership gives him a valuation of his current vehicle of £6,000. This is £500 higher than the amount required to settle the outstanding finance on his current car (£5,500) so he decides to use this as equity for his new car rather than return his current car to his current lender under the terms of his PCP deal. He will therefore pay the £5,500 to his current PCP lender and have £500 to use as a deposit on his new car. Mr Jones also has £1,000 cash savings. Using the £500 equity in his current car, plus his savings he has a deposit of £1,500 to pay directly to the dealership. When applying for Halifax Car Finance, Mr Jones inputs the price of the car as £13,200, his deposit as £1,500 and therefore his borrowing amount as £11,700.
    2. Ms Singh owns her car outright but fancies a change. She has seen a car for sale at £8,000. The dealership offers her £1,750 for her current car which she accepts. Adding her cash savings of £250 to this gives her a deposit of £2,000. When applying for Halifax Car Finance, Ms Singh inputs the price of the car as £8,000, her deposit as £2,000 and therefore her borrowing amount as £6,000.

When your plan is ending

  • You’ll need to request an early settlement figure from us, which you can do online, and settle your current contract before you change the car. You’ll also have the option to voluntarily terminate your contract. Our customer service team will be able to give you details of the early settlement balance or more information about voluntary termination, and the steps you’d need to take.

    You also have the option to voluntary terminate your agreement. You will need to return the car and half of the total amount payable as detailed on your agreement documentation. If you have already paid at least this amount plus any overdue repayments and have taken reasonable care of the car, you will not have to pay any more.

  • If you decide to keep the car you will need to pay the final payment (Hire Purchase HP) or the final lump sum payment (Personal Contract Purchase PCP). It is important that Personal Contract Purchase (PCP) customers prepare for how they will make the final lump sum payment.

  • We’ll contact you 90 days before the end of your finance agreement to outline the options you have. If you decide to return the car to us, we can either:

    • Arrange to pick the car up from you free of charge providing the car is driveable and road legal
    • Or, if you’d prefer you can return it to one of the authorised venues across the UK, if the car cannot be driven and requires a tow truck a charge may apply.

    To return the car, you will need to call us.

    Once the car has been collected or returned, we’ll check the mileage and that it’s in good condition*. Providing that you have not exceeded the maximum agreed mileage and the vehicle is in good condition, we’ll write to you confirming that the agreement has ended and your Car Finance account is closed. If the vehicle has exceeded the maximum agreed mileage a charge per excess mile will apply.

Vehicle information

Payments and fees

  • When you’ve signed the legal documents online, we’ll transfer the agreed finance direct to the dealership. It can take several hours for the money to be received by the dealership. Payments sent after 2.30pm will be with the dealership before 12 noon the following day.

  • No. We don’t provide insurance as part of a car finance agreement. You must comprehensively insure any financed vehicle. You can take out a car insurance policy with us separately if you like.

  • Purchase fee – this is optional, but if you want to become the owner of the car you must pay it. It’s included in the Final Repayment.

    Excess mileage fees – only applicable on PCP if you choose to return the car at the end of the agreement. This is instead of paying the final lump sum to keep the car. This fee is avoidable by agreeing a realistic mileage when applying for the finance.

    All excess mileage fees shown are including 20% VAT:

    • Engine size is up to 1.6 litres - it would be 8.4p per mile exceeding the agreed mileage.
    • Engine size is between 1.6 litres to 2.0 litres – 12.6p per mile exceeding the agreed mileage.
    • Engine size is more than 2.0 litres – 16.8p per mile exceeding the agreed mileage.
    • The car is electric – 9.6p per mile exceeding the agreed mileage.

    You must return the car in good condition, otherwise you’ll be charged for repairs outside of reasonable wear and tear. You can avoid these charges by taking good care of the car.

  • If your current provider allows you to, then yes.

    If you’re planning to refinance your car with us, just make sure any extra payments you want to make to your current provider are completed in advance. If you make a payment after applying for car finance, we'll decline your application. That’s because the settlement figure from your current provider and the amount you want to borrow will no longer match.

    This won’t impact your credit file, but you’ll have to start a new application and provide an updated settlement figure.

    You can make extra payments to us once we are your finance provider, without any fees or charges.

  • You can store your invoice with the rest of the cars documentation, as the invoice is for your record only. You may need this in future when title is transferred to you as proof of purchase.

Managing your agreement

Aftercare

  • We'll arrange delivery with you if you’re looking to lease a car. For any other type of car finance, this isn’t something we offer. But it’s something you may be able to arrange with the dealership direct.

  • Contact your dealer first as this is usually the quickest way to find a solution. If this isn’t possible, or you’re not happy with the outcome, you can make a complaint through us.

    To help us answer your complaint quicker, we may ask you to send us supporting evidence. Examples could include an independent
    vehicle inspection report, or a fault diagnostic report.

Already have car finance with Halifax?

If you’re already a Halifax customer, you can find out more about how to access your account online.

Existing customers

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