There are three main ways to finance a new car. A car loan, hire purchase or car leasing. And while there are plenty of comparison websites for loans, the Internet fares less well when it comes to providing sufficient comparative information for the other two types of car finance. More specifically, there hasn’t existed one site that helps car buyers compare all three types of car finance options, says FinanceAcar, a new UK startup that today has launched what it claims to be the world’s first car finance comparison engine.
Aiming to answer the question “what is the lowest monthly price I need to pay to drive the car that I want?”, at launch the site compares finance options from top UK lenders for 6,000 vehicles and offers more than 1,000,000 different prices.
This, says the company, fills an estimated £11.5 billion gap left by traditional comparison websites in the UK such as Moneysupermarket.com that only compare car finance prices based on car loans. That’s because a car loan is the preferred option of just 1 in 5 car buyers, therefore a lot of consumers aren’t being catered for. By comparing options side by side, they’ll also be in a much better position to negotiate better finance where previously the dealerships held all the cards.
Co-founder Nadim Saad gives the following example: “A BMW 1 series can be financed on a car lease for as little as £220/month and after 3-4 years you can have a stress free new upgrade much the same way as your mobile handset. The traditional alternative is to pay £600/month to buy the car and keep it.”
The market is huge too. According to the Finance and Leasing Association and Keynote, at least 80% of all car shoppers use car finance for the average 2 million new vehicles acquired each year in the UK (market of circa £19 billion/year).
A Seedcamp London winner, FinanceAcar is founded by Mark Peatey who launched ITV.com back in 2000 (he left in 2005) and Saad who launched a finance comparison site in Latin America during the dot com boom.