Online searches for car finance advice have risen sharply over the past year, with demand for affordable ways to buy vehicles continuing to grow amid ongoing cost pressures.
New data shows a 200% increase in searches for phrases such as “what is the best car finance deals”, reflecting the growing number of drivers turning to finance options rather than outright purchase.
Against that backdrop, automotive retailer Vertu Motors has highlighted several persistent misconceptions around car finance, warning that misunderstandings could lead drivers into unsuitable or more expensive agreements.
Leasing and financing still widely confused
According to Vertu, one of the most common areas of confusion remains the difference between leasing and financing. Leasing typically involves renting a vehicle for a fixed term, often between two and four years, with no ownership at the end of the agreement. Financing, by contrast, involves taking out a loan to purchase the vehicle, with payments contributing towards eventual ownership.
The retailer says failing to understand this distinction can lead buyers to select products that do not match their long-term needs or budgets.
Credit scores are not the only factor
Vertu also notes that many drivers mistakenly believe a perfect credit score is essential to secure car finance. While stronger credit ratings can lead to lower interest rates, lenders also consider factors such as income, employment stability and affordability. Drivers with weaker credit histories may still be eligible for finance, although often at higher rates.
Deposits and early repayments may not always save money
The company has also challenged assumptions around deposits and early loan repayments. While larger deposits can reduce monthly payments, Vertu warns that stretching finances too far can leave motorists vulnerable to unexpected costs, such as repairs or maintenance.
Similarly, paying off a loan early is not always the cheapest option. Some finance agreements include settlement or early repayment fees, which can reduce or eliminate any potential savings.
Dealership finance not always the most expensive
Another widespread belief is that dealership finance is automatically more expensive than other options. Vertu says this is not always the case, as dealers often work with multiple lenders and may offer competitive rates. However, drivers are still advised to compare offers across banks, credit unions and online providers before committing.
Vertu says greater awareness of how car finance products work could help buyers make more informed decisions at a time when affordability is a key concern for many motorists.
