Car Finance FAQs

Who can apply 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.

Are there any restrictions on which car I can buy?

Yes, there are some restrictions on which car you can buy.

Limitations do apply to which cars we’ll offer finance on, such as the make, model, age, and mileage. When entering details of the car you want to buy through online banking, we’ll let you know if our finance is available for it.

We don’t finance commercial vehicles, motorcycles or leisure products, such as caravans and motor homes.

Can I part-exchange my current car?

Part-exchange isn’t something we offer as part of a car finance deal. You might be able to part-exchange with a dealership who, if applicable, could settle any outstanding finance on your vehicle.

Can I use any car dealership?

No. To find out which dealerships we work with, log in to online banking and search by your location or postcode.

Or browse the interactive map.

Can you arrange for the car to be delivered to me?

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.

How do Halifax pay for my car and how long will it take?

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.

Do you offer car finance for motorbikes or vans?

 No. Our finance is only available for cars. 

Can I use Halifax Car Finance to buy a car for business purposes?

No. We offer car finance on personal cars only – not for business purposes.

If I finance a car, can I register it in someone else’s name?

No. The person who applies for finance should be the registered keeper of the car. They should have a valid driving license and be the main driver. We don’t allow for a car to be registered in someone else’s name.

Can I transfer my agreement to someone else?

No, you can’t transfer your car finance agreement to someone else.

Do I have to be on the voters/electoral roll to be approved for car finance?

No, however being on the electoral roll can help to improve your credit score, which we do take into consideration.

Why do I need to use online banking?

Halifax Car Finance is only available to existing customers who apply through online banking. When you’re logged in you can use a personalised calculator to compare each car finance option.

If you don’t use online banking already, it only takes a few minutes to register.

What paperwork will I need to apply?

When applying for Halifax Car Finance, we won’t need you to provide any paperwork. We’ll send any agreements to you by email.

Read all paperwork carefully and store it securely for future reference. We’ll also send you a welcome letter that confirms your monthly payments and direct debit details.

Is car insurance included as part of car finance?

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.

Fees at the end of your agreement

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.

My car is faulty, what do I do?

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.

I'm not a Halifax customer - can I apply?

No. Halifax Car Finance is only available to existing customers who:

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

How does the application work?

• 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.

What details do I need before I apply?

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.

What is a settlement figure and how do I get one?

A settlement figure is the exact amount you’d need to pay to end the agreement you have with a finance provider.

You can get a settlement figure by contacting your finance provider direct.

Can I make a payment towards my settlement figure with my current provider?

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.

Can I apply in branch?

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

How many online applications can I make?

You can make as many car finance applications as you like, without any impact to your credit record. However, we can only save one application at a time.

Subject to approval, we’ll hold your finance offer open for up to 90 days.

Can I apply using my joint account?

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.
  

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.

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 (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.

If I decide to give the car back at the end of my Personal Contract Purchase (PCP) 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, 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.

Will Halifax perform a credit search when I apply?

When you apply for Halifax Car Finance, there'll be no impact on your credit score 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. Learn more about how credit works.

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. 

What is the lump sum on the Personal Contract Purchase (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 Hire Purchase (HP) finance option, which is why monthly payments are usually higher than with the Personal Contract Purchase (PCP) option.

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.

What's the difference between Car Finance and an unsecured personal loan?

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.

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.

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:

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.