Car Finance Faqs
- 1. Jump to Who is eligible for Car Finance?
- 2. Jump to Are there any restrictions on which car I can buy?
- 3. Jump to Can I part-exchange my current car?
- 4. Jump to Can I use any car dealership?
- 5. Jump to Can you arrange for the car to be delivered to me?
- 6. Jump to How do Halifax pay for my car and how long will it take?
- 7. Jump to Do you offer Car Finance for motorbikes or vans?
- 8. Jump to Can I use your Car Finance to buy a car for business purposes?
- 9. Jump to If I finance a vehicle, am I able to register the car in another family member's name?
- 10. Jump to Can I transfer my agreement to someone else?
- 11. Jump to Do I have to be on the voters/electoral roll to get approved for Car Finance?
- 12. Jump to Why do I need Online Banking?
- 13. Jump to What paperwork will I need?
- 14. Jump to Is car insurance included as part of Car Finance?
- 15. Jump to Fees at the end of your agreement
Who is eligible for Car Finance?
You could 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. You must be aged 18 or over, be a UK resident, be registered for internet banking and have held a Halifax personal current account for a minimum of 3 months.Back to top
Are there any restrictions on which car I can buy?
We offer finance for new and used cars at the majority of UK dealerships. There are some restrictions relating to make/model, age and mileage of the car, and we can't finance commercial vehicles. After you enter the details for the car you want to buy, we’ll tell you if our finance is available for that car.
We do not finance commercial vehicles, motorcycles or leisure products such as caravans and motorhomes. Other limitations based on the vehicle may applyBack to top
Can I part-exchange my current car?
We don’t currently offer part exchange as part of our Car Finance however you could arrange a part exchange with the dealership, who can settle any existing finance on your vehicle, if applicable.Back to top
Can I use any car dealership?
We work with the majority of UK dealerships - you can search by your location or postcode to find out which dealers we currently work with, once logged on to Online Banking.Back to top
Can you arrange for the car to be delivered to me?
We don’t currently offer a delivery service as part of our Car Finance, however you could arrange this directly with the dealership. They may be able to offer you a contactless delivery service.Back to top
How do Halifax pay for my car and how long will it take?
We transfer the finance amount to the dealership directly as soon as you've signed the legal documents online. It can take several hours for the money to be received. Payments made after 2.30pm will be with the dealership before 12pm the following day.Back to top
Do you offer Car Finance for motorbikes or vans?
Unfortunately not, our finance is only available for cars.Back to top
Can I use your Car Finance to buy a car for business purposes?
Unfortunately not, you can only take Car Finance for personal, not business purposes.Back to top
If I finance a vehicle, am I able to register the car in another family member's name?
We do not allow the vehicle to be registered in another family member’s name. The person applying for finance should be the registered keeper of the vehicle, have a valid driving licence permitting them to use the vehicle and also be the main driver.Back to top
Can I transfer my agreement to someone else?
No, you cannot transfer an agreement to someone else.Back to top
Do I have to be on the voters/electoral roll to get approved for Car Finance?
Not necessarily, although this could affect your credit score, if you’re not.Back to top
Why do I need Online Banking?
Halifax Car Finance is an online offer only. Once you've registered for Online Banking (it’s easy to register and only takes a few minutes) you can use the personalised calculator to see what each Car Finance option could look like for you.Back to top
What paperwork will I need?
You will not need to provide any paperwork and details of your finance agreement will be sent to you by email. You should read all paperwork carefully and store it in a safe place. We’ll send you a welcome letter which confirms your monthly payments and direct debit details.Back to top
Is car insurance included as part of Car Finance?
Car insurance is not included as part of the finance we offer although it is available separately. Please note we need the car to be comprehensively insured.Back to top
Fees at the end of your agreement
Potential fees at the end of your agreement
At the end of your agreement
Purchase fee - This is optional, but you must pay it if you want to become the owner of the Vehicle. It is included in the Final Repayment
Excess mileage fees -
Applicable on PCP only if you choose to return the vehicle at the end of your agreement instead of paying the final lump sum
If you exceed your agreed mileage
If your engine size is up to 1.6 litres = 8.4p per mile
If your engine size is more than 1.6 litres up to 2.0 litres = 12.6p per mile
If your engine size is more than 2.0 litres = 16.8p per mile
If your car is electric = 9.6p per mile
(All excess mileage fees shown are including VAT at 20%)
- The vehicle must be in good condition, you will be charged for any repairs outside the acceptable fair wear and tear if this is not the case. You can avoid these charges by taking good care of the vehicle
- If you have exceeded the agreed mileage allowance, you will need to pay an excess mileage charge. You can avoid this by agreeing a realistic mileage at the outset.
- 1. Jump to I'm not a Halifax customer - can I apply?
- 2. Jump to How does the application work?
- 3. Jump to What details do I need before I apply?
- 4. Jump to What is a settlement figure and how do I get one?
I'm not a Halifax customer - can I apply?
No - our Car Finance offer is for existing customers who have held a Halifax current account for more than 3 months, are UK residents and aged 18 and overBack to top
How does the application work?
- First you can use our calculator to compare options available to you. This calculator is personalised and lets you know what you’re able to borrow
- The next step is to enter the details or the car and dealership you’re using. You can use the ‘Find Dealer’ section to check if a dealership is eligible before completing the application
- We will then complete an affordability assessment and subject to your application being accepted, we’ll keep the offer for you for up to 90 days
- Finally you need to enter the bank details of the dealership you’re using to complete the finance agreement. We’ll then pay the dealership direct.
What details do I need before I apply?
Once you’ve found the car you want to buy, we’ll need some further details.
- Dealer’s name, postcode and bank account details
- The registration number
- Current and expected yearly mileage
- The price and deposit paid
- Your financial details, including your monthly income and existing finance commitments
If it’s a new car, we’ll also need:
- the delivery date of your car
- the full vehicle details, if you don’t know the registration yet
What is a settlement figure and how do I get one?
This is the exact amount needed to end the agreement you have with your current finance provider. You’ll need to get in touch with your current finance provider and ask them to send this to you.Back to top
Can I make a payment towards my settlement figure?
Yes, you can do this if your existing provider allows you to. You’ll need an up-to-date figure before you submit your application though, so if you make a payment after submitting your application, the settlement figure and amount you want to borrow will no longer match, and your application will be declined.
This won't affect your credit file, but you’ll have to start a new application with an updated settlement figure to continue.
You can make extra payments to us at any time without any charges or fees.Back to top
How many applications can I make?
You can make as many applications online as you like, without any credit searches because you’re already our personal current account customer and we’ll keep the offer for you, up to 90 days. However, you can only have one application saved at a time.Back to top
Can I apply using my joint account?
Providing you’re eligible you can apply using your joint account but the application will be registered against the customer that is currently signed in. This means the Car Finance contract will be in one name only and can only be administered by that customer.
- When completing the application the answers you give should only reflect your individual circumstances
- Income should be entered as your personal income not the full household income
- Outgoings should be entered as your contribution to those costs.
What if I want to change my car before the end of the term?
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.Back to top
What if I decide I want to keep the car?
If you decide to keep the car you will need to pay the final payment (Fixed HP Plan) or the final lump sum payment (Flex PCP). It is important that Flex PCP customers prepare for how they will make the final lump sum payment.Back to top
If I decide to give the car back at the end of my Flex Car Finance term how do I return it?
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, you’ll need to call our customer services team on +44 (0)333 202 7946. 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.
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.Back to top
- 1. Jump to Will Halifax perform a credit search when I apply?
- 2. Jump to Can I transfer my existing car finance arrangements or do you offer finance consolidation?
- 3. Jump to What is the lump sum on the Flex (PCP) option?
- 4. Jump to What does APR mean?
Will Halifax perform a credit search when I apply?
When you apply for Halifax Car Finance, we don’t need to do any additional credit searches, because we already know you. This means that you can browse your options and apply for Car Finance with no impact on your credit report. If you take out a Car Finance plan, this will be detailed on your credit report.Back to top
Can I transfer my existing car finance arrangements or do you offer finance consolidation?
Yes, you can refinance most finance agreements with other providers. You can find information about this in the ‘Who is eligible for car finance?’ section, and get personalised quotes and make an application online.
You can’t use this service to pay off a loan or credit card you’ve bought a car with.
If you refinance existing debts, you may pay a higher rate of interest or make repayments over a longer term. This means that you may pay more interest overall.Back to top
What is the lump sum on the Flex (PCP) option?
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 Fixed (HP) finance option, which is why monthly payments are usually higher than with the Flex (PCP) option.Back to top
What does APR mean?
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.Back to top
What's the difference between Car Finance and an unsecured personal loan?
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.
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 purchaseBack to top
Loan purpose - Could use for other purposes as well as car purchase
Deposit required to take finance out - No
Extra protection - No
What should I do with the dealership's invoice?
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.Back to top
How do I work out my deposit?
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:
- 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.
- 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.