TrustScore 4.4 | 14,240 reviews
TrustScore 4.4 | 14,240 reviews
TrustScore 4.4 | 14,240 reviews
TrustScore 4.4 | 14,240 reviews
TrustScore 4.4 | 14,240 reviews
TrustScore 4.4 | 14,240 reviews
TrustScore 4.4 | 14,240 reviews
Black box car finance, also known as pay-as-you-go (PAYG) car finance, is a type of Hire Purchase (HP) agreement where a small device called a ‘black box’ is installed in the vehicle you are financing.
The black box serves as a payment reminder system and allows the lender to remotely immobilise the vehicle if you fail to make your monthly payments on time.
Pay-as-you-go car finance isn’t something we offer at Moneybarn, but it is a term you may have come across elsewhere when searching for vehicle finance providers.
In this guide, we explore how pay-as-you-go car finance works, what happens if you miss a payment and the other types of bad credit car finance agreements available.
Black box car finance is typically offered to people with poor credit histories or those who have previously struggled with making finance payments on time.
Lenders view it as a way to reduce the risk of non-payment, as they can disable the vehicle if you fail to make a payment.
The black box is removed once you have completed all payments and taken ownership of the car.
Here’s a closer look at how pay-as-you-go car finance works in practice:
Some black box car finance agreements also ask you to enter a confirmation code into the box after you make your monthly repayment.
This can help you to finance a car if you have a poor credit history, as it gives the lender confidence that the payments will be made on time.
Credit checks are an important part of applying for car finance. Lenders must make credit and affordability checks to ensure you can afford the monthly repayments.
When you apply for car finance, two credit checks may take place.Â
Black box car finance, also known as pay-as-you-go (PAYG) car finance, is a type of Hire Purchase (HP) agreement where a small device called a ‘black box’ is installed in the vehicle you are financing.
The black box serves as a payment reminder system and allows the lender to remotely immobilise the vehicle if you fail to make your monthly payments on time.
Pay-as-you-go car finance isn’t something we offer at Moneybarn, but it is a term you may have come across elsewhere when searching for vehicle finance providers.
In this guide, we explore how pay-as-you-go car finance works, what happens if you miss a payment and the other types of bad credit car finance agreements available.
Black box car finance is typically offered to people with poor credit histories or those who have previously struggled with making finance payments on time.
Lenders view it as a way to reduce the risk of non-payment, as they can disable the vehicle if you fail to make a payment.
The black box is removed once you have completed all payments and taken ownership of the car.
Here’s a closer look at how pay-as-you-go car finance works in practice:
Some black box car finance agreements also ask you to enter a confirmation code into the box after you make your monthly repayment.
This can help you to finance a car if you have a poor credit history, as it gives the lender confidence that the payments will be made on time.
Credit checks are an important part of applying for car finance. Lenders must make credit and affordability checks to ensure you can afford the monthly repayments.
When you apply for car finance, two credit checks may take place.Â
The first is a soft credit check, which shows all the information you can see when you look at your credit score. Some finance companies do soft credit checks to see if your application would be successful without conducting a hard search on your credit report.
If you pass the soft check and commit to the car finance, the lender will do a hard credit check. This will show up on your credit report for 12 months and affect your credit score. Multiple hard credit checks in a short space of time could affect your credit score and make it seem like you are over-reliant on credit.
The first is a soft credit check, which shows all the information you can see when you look at your credit score. Some finance companies do soft credit checks to see if your application would be successful without conducting a hard search on your credit report.
If you pass the soft check and commit to the car finance, the lender will do a hard credit check. This will show up on your credit report for 12 months and affect your credit score. Multiple hard credit checks in a short space of time could affect your credit score and make it seem like you are over-reliant on credit.
Some lenders might not do a soft check and instead make a hard check as soon as you apply. Read our blog for more about the differences between soft and hard search credit checks.
Some lenders might not do a soft check and instead make a hard check as soon as you apply. Read our blog for more about the differences between soft and hard search credit checks.
If you miss a payment and have black box car finance, the lender may get in touch to discuss the support available to you if you’re experiencing financial difficulties.
If you miss a payment and have black box car finance, the lender may get in touch to discuss the support available to you if you’re experiencing financial difficulties.
If you aren’t able to come to an agreed plan to catch up with the payments, the black box would deactivate your car until the outstanding balance is paid.
If you aren’t able to come to an agreed plan to catch up with the payments, the black box would deactivate your car until the outstanding balance is paid.
Find out more about what happens if you can’t pay your car finance in our guide.
Black boxes are usually fitted under the dashboard or in the glove box and connected to your car’s internal computer. The box is removed once the final payment is made.
Hire Purchase is a type of car finance deal that lets you borrow money to buy a new car. The car finance company pays the dealership for the vehicle, and you make monthly payments until the amount you borrowed is paid off plus interest.
On a typical HP agreement, you pay a deposit (usually 10% of the car’s value) and then make monthly payments for the contract duration.
At the end of the contract, you can pay an ‘option to purchase fee’ to buy the car outright. The lender will tell you this figure before you sign the agreement. When you’ve paid this fee, you’ll be the car’s legal owner.
Read more about HP agreements in our ‘What is Hire Purchase?‘ guide.
Find out more about what happens if you can’t pay your car finance in our guide.
Black boxes are usually fitted under the dashboard or in the glove box and connected to your car’s internal computer. The box is removed once the final payment is made.
Hire Purchase is a type of car finance deal that lets you borrow money to buy a new car. The car finance company pays the dealership for the vehicle, and you make monthly payments until the amount you borrowed is paid off plus interest.
On a typical HP agreement, you pay a deposit (usually 10% of the car’s value) and then make monthly payments for the contract duration.
At the end of the contract, you can pay an ‘option to purchase fee’ to buy the car outright. The lender will tell you this figure before you sign the agreement. When you’ve paid this fee, you’ll be the car’s legal owner.
Read more about HP agreements in our ‘What is Hire Purchase?‘ guide.
Accessible for people with a poor credit rating or history.
The car may be disabled if you miss your monthly payments.
It can help you to get approved if you’ve been refused car finance elsewhere.
The black box will only be removed once you’ve made the final payment.
Making payments on time can help to build your credit score.
Higher interest rates may apply if you have a bad credit score.
Accessible for people with a poor credit rating or history.
It can help you to get approved if you’ve been refused car finance elsewhere.
Making payments on time can help to build your credit score.
The car may be disabled if you miss your monthly payments.
The black box will only be removed once you’ve made the final payment.
Higher interest rates may apply if you have a bad credit score.
Yes, pay-as-you-go car finance is designed for people with bad credit ratings to help them get car finance where mainstream lenders might have refused them. It also helps to remind them of their payment date so they can ensure they make payments on time and in full.
Installing a black box can help prove that you can manage credit responsibly and make your payments on time. Showing that you are a responsible borrower and can stick to your repayment schedule can help to improve your credit rating over time.
Read ‘How to improve your credit score’ for more information on your credit score and steps you could take that may help to increase it.
A black box isn’t the only way to get car finance if you have a poor credit history. There are specialist lenders like Moneybarn that could help you get bad credit car finance without a black box.
Yes, pay-as-you-go car finance is designed for people with bad credit ratings to help them get car finance where mainstream lenders might have refused them. It also helps to remind them of their payment date so they can ensure they make payments on time and in full.
Installing a black box can help prove that you can manage credit responsibly and make your payments on time. Showing that you are a responsible borrower and can stick to your repayment schedule can help to improve your credit rating over time.
Read ‘How to improve your credit score’ for more information on your credit score and steps you could take that may help to increase it.
A black box isn’t the only way to get car finance if you have a poor credit history. There are specialist lenders like Moneybarn that could help you get bad credit car finance without a black box.
We have over 30 years of experience helping people up and down the UK. If you’ve been rejected by other lenders, or have a CCJ or IVA, we could help.
We offer a Conditional Sale (CS) agreement, which means we pay the dealership for your vehicle, and then you make fixed monthly repayments over 36-60 months.
Once you make your final payment, you’ll become the legal owner with no ‘option to purchase fee’ and no black box needed.
Get a quote in less than 5 minutes or use our car finance calculator to see what your agreement could look like.
Representative 30.7% APR.
We use a soft search at the point of application which doesn’t affect your credit rating. We only use a hard search when you’ve found your dream car and contracts are made for you to sign.
We have over 30 years of experience helping people up and down the UK. If you’ve been rejected by other lenders, or have a CCJ or IVA, we could help.
We offer a Conditional Sale (CS) agreement, which means we pay the dealership for your vehicle, and then you make fixed monthly repayments over 36-60 months.
Once you make your final payment, you’ll become the legal owner with no ‘option to purchase fee’ and no black box needed.
Get a quote in less than 5 minutes or use our car finance calculator to see what your agreement could look like.
Representative 30.7% APR.
We use a soft search at the point of application which doesn’t affect your credit rating. We only use a hard search when you’ve found your dream car and contracts are made for you to sign.
If you haven’t heard of black box car finance before, you may be familiar with black box car insurance.
The black box installed by insurance companies tracks your driving style, such as your speed and braking, and when you drive. Insurers use this data to calculate your driving style and adjust your insurance premiums based on their assessment.
Black boxes installed by car finance companies don’t usually monitor your driving style but can help you to keep up with your repayments. Usually, a few days before your monthly instalment is due, the box will flash a red light to remind you that your payment date is coming up.
No, agreeing to have a black box installed does not guarantee your approval for car finance. Guaranteed car finance does not exist in any form, whether that’s with or without a black box.
Lenders have the final say over whether someone is approved for car finance, and a responsible lender will never say that their car finance is guaranteed.
If you haven’t heard of black box car finance before, you may be familiar with black box car insurance.
The black box installed by insurance companies tracks your driving style, such as your speed and braking, and when you drive. Insurers use this data to calculate your driving style and adjust your insurance premiums based on their assessment.
Black boxes installed by car finance companies don’t usually monitor your driving style but can help you to keep up with your repayments. Usually, a few days before your monthly instalment is due, the box will flash a red light to remind you that your payment date is coming up.
No, agreeing to have a black box installed does not guarantee your approval for car finance. Guaranteed car finance does not exist in any form, whether that’s with or without a black box.
Lenders have the final say over whether someone is approved for car finance, and a responsible lender will never say that their car finance is guaranteed.
Moneybarn is a member of the Finance and Leasing Association, the official trade organisation of the motor finance industry. The FLA promotes best practice in the motor finance industry for lending and leasing to consumers and businesses.
Moneybarn is the trading style of Moneybarn No. 1 Limited, a company registered in England and Wales with company number 04496573, and Moneybarn Limited, a company registered in England and Wales with company number 02766324. The registered address for these companies is: Athena House, Bedford Road, Petersfield, Hampshire, GU32 3LJ.
Moneybarn’s VAT registration number is 180 5559 52.
Moneybarn Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702781)
Moneybarn No. 1 Limited is authorised and regulated by the Financial Conduct Authority (Financial Services reference No. 702780)
