Buying a car is one of life's big decisions. Green or blue? Automatic or manual?  So many choices! And whether you need a reliable runaround or a sleek upgrade, it can be expensive.

Many buyers choose dealer finance without considering other options. However, a personal loan could provide a flexible alternative. 

In fact, approximately 14% of our customers apply for loans to help fund their next car.

With repayment terms that fit your needs, it offers a way to spread the cost while giving you full ownership from the very start. If you're weighing up finance options, it's one worth thinking about.

At V12 Personal Finance, we make it simple to compare loan options from a trusted panel of lenders and a broker. Our personal loan eligibility checker only uses a soft search, so you can check your eligibility in minutes without affecting your credit score.

Let's take a look at why a personal loan might be the smarter way to buy your next car.

Why consider a personal loan for your next car?

When you take out a personal loan, you borrow a fixed amount and repay it in regular instalments over an agreed term. Here's why that matters:

Personal loans: what to remember

For all the benefits of a personal loan, it's important to know the risks.

It's important to carefully consider the type of loan that best suits your needs, as well as the term and amount that are suitable and affordable to you.

Check if there are early repayment options and if there are any charges applicable, and remember, taking out a loan means committing to regular repayments over a set period and missing those payments can negatively impact your credit score, result in additional fees and make future borrowing more difficult.

Everyone is different, so be sure to research whether a loan is right for you before committing to one.

Is now the perfect time?

As we leave 2025 behind and say hello to 2026, seasonal trends could help shape your next move and when to take it when it comes to buying a car.

Whatever you're looking for, whether that's a top of the range SUV or a cheaper used option, here's what to look out for:

Used cars are typically in higher demand after plate registration months (September/March) when part-exchanges begin to appear. If you're in the market for a deal, keep a lookout in February, August and December when car demand is lower and lower-priced promotions appear.

Comparing a personal loan to dealer finance

Dealer finance often seems convenient, but it can come with strings attached.

PCP and HP deals usually require deposits, impose mileage limits and may leave you with a large final payment if you want to keep the car.

With a personal loan, you avoid those restrictions and own the car outright from day one.

Key benefits of using an unsecured personal loan

Spread your costs: Choose a term to help pay overtime and protect your savings.
Competitive rates: Especially if you have a strong credit profile.
No asset risk: Unlike secured loans, your car isn't at risk of repossession if you miss repayments.

Things to check before applying

Before you hit apply, sense check your plan:

•    Affordability: Can you manage repayments alongside insurance, tax and maintenance?
•    APR and total cost of credit: Don't just focus on the monthly figure, look at the overall amount you'll repay.
•    Your credit score: Higher scores often mean better rates.

For practical car buying tips, download the AA car buyer's checklist. It's a great resource for spotting issues before you commit.

Remember that buying a car should be exciting, not stressful. A personal loan can give you the freedom to shop around, own your car outright and budget with confidence. Don't forget to plan and budget for the future so you don't get any unwanted surprises. 

For extra peace of mind, you can review official guidance on buying a vehicle from the DVLA and RAC's tips for buying a car.

With V12, you can check your eligibility for a personal loan without harming your credit score and compare offers from our trusted panel, all in one simple place.

How V12 Personal Finance makes it simple

Soft eligibility check:  Won't affect your credit score. Once you accept a lender's offer, a hard check will be undertaken to see the full picture. Read more here.
Trusted panel: Compare offers to make the best decision for you.

Fast decisions: Money often in your account quickly once approved.

Ready to find your car? Check your personal loan eligibility now, it only takes a few minutes.

*Each agreement type is different, therefore it's impossible to predict which is cheaper. Please do your research before taking out any type of finance.

Representative example: If you borrow £5,500 over 5 Years at a Representative APR of 21.9% and an annual interest rate of 21.9% (fixed) you would pay £152.59 per month. Total amount repayable £9,155.49. Minimum repayment period is 12 months. Total charge for credit will be £3,655.49. 

Credit is subject to status, the % APR rate you will be offered is dependent on your personal circumstances.

It's important to carefully consider the type of loan that best suits your needs as well as a term and amount that is suitable and affordable.
 
V12 Retail Finance Limited is registered in England and Wales 4585692. Authorised and regulated by the Financial Conduct Authority. Registration number: 679653. Registered office: Yorke House, Arleston Way, Solihull, B90 4LH Correspondence address: 25-26 Neptune Court, Vanguard Way, Cardiff, CF24 5PJ. V12 Personal Finance is a trading name of V12 Retail Finance Limited.

V12 Personal Finance is a credit broker, not a lender. V12 Personal Finance introduces you to a limited range of brokers or lenders who may offer you a loan. V12 Personal Finance does not work with the whole of the lending market, meaning other loans may be available to you elsewhere.

V12 Personal Finance does not give you any recommendation or advice. V12 Personal Finance acts for itself and is not impartial. It does not act for you or for the lenders or brokers it works with.

V12 Personal Finance receives a fixed or percentage commission payment from the lender or broker if you take out a loan. The commission it receives varies depending on the product, loan amount or APR. Loan offers (if available) are shown in this order: unsecured loans followed by secured loans, ranked by the closest matched loan amount, term and lowest APR respectively. Before completing your application, you will be shown the commission arrangement between V12 Personal Finance and the lender or broker you have selected.

Credit is subject to status. You must be UK resident aged 18 and over, with a regular provable income. If you are a homeowner, V12 Personal Finance may provide you with details of loans secured against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

To make things easier, we'll share the information (including your personal details) that you confirm and provided during this eligibility check with our panel of lenders or brokers. We do this so that they can provide you with a quote for the loan you have requested and to save you from having to tell them again. Details of our panel can be found here.

You can read more about how we use your personal data in our privacy statement.

Warning: late payment can cause serious money problems.

For help, go to moneyhelper.org.uk