Halifax has launched a unique online car financing service.
Halifax Car Plan Extra allows borrowers to pre-arrange secured financing for a car they plan to buy and have the money transferred to a dealership once the sale has been agreed.
The bank will provide car financing between £3,000 and £60,000 through hire purchase or personal contract purchase, with payment plans lasting between 12 and 60 months. It's only available on used cars at the moment, but Halifax is hoping to roll it out to new cars in the coming months.
Financing is secured against the car, giving borrowers with the best credit histories a representative APR of 3.6%, which is lower than many car dealerships. As Halifax is already familiar with its customers’ histories, it won’t need to run a credit check for car financing either, so no marks are left on your credit rating.
The offer is open to Halifax internet banking customers who have had a current account for at least three months.
Need a car loan? Compare deals in the lovemoney.com loan centre
How to access it
If you’re a Halifax internet banking customer, you can access the service via the Car Finance tab on your online banking homepage.
A personalised calculator will be able to show you finance options to match your circumstances, even if you haven't picked a car yet.
There are two finance plans available:
Fixed Car Plan
As this is a hire purchase plan, your monthly payment amount is fixed for the length of your plan, which will be higher than the Flex option. You’ll own the car when you’ve made the final payment and you can pay off your finance early with no extra fees or charges. There are no annual mileage limits, either.
Flex Car Plan
With this plan, the monthly payment amount is lower than Fixed because there’s a lump sum to pay at the end. From here, you have the option to pay the lump sum and take ownership of the car or return it to the dealer. If you opt for the former, you can either keep it or part exchange it as part of a different purchase. Unlike the fixed plan, you set your annual mileage limit which you’ll be charged for if you exceed.
[SPOTLIGHT]Not every UK dealership is involved in the scheme, but if you enter your postcode at this point, you’ll be able to find out which dealerships are closest to you.
Once you’ve found your ideal car from your chosen dealership, sign back into your Halifax account and choose the finance option that suits you. Pop in some details about you, the car and the dealership and you’ll get a response right away.
Confirm the purchase with your dealership, go back to your online account and Halifax will pay your dealership directly. Arrange a car pick-up with the dealership and pay them the pre-agreed deposit.
Other ways to finance your car
Buying your car with cash is almost always the best option. You are in a strong position to haggle the price down, and you won't have to worry about paying any interest.
But if you need to use credit, you have plenty of options, from personal loans to personal contract purchases. Read Car finance options: credit, loans, HP and leasing for more.
Need a car loan? Compare deals in the lovemoney.com loan centre