A tight budget or a patchy credit history does not rule out a reliable car. Most of the cars that are cheapest to finance are small hatchbacks that cost little to insure and run, and they are also the kind of car specialist lenders are most comfortable approving when your credit file has a few marks on it.
This guide picks out ten of the most affordable cars to get on finance in the UK, with a rough idea of what each costs and why it makes sense when every pound of the monthly payment matters. We have looked at both new and used prices, because a three- or four-year-old example of most of these cars costs roughly half the new price, and that is where many budget buyers find the best value.
If you are new to car finance, our guide to how car finance works explains the basics before you start comparing cars.
How we picked these cars
We started with entry-level versions of the UK’s cheapest mainstream small cars, then kept the ones with low running costs and plenty of examples on the used market. The deciding factor was whether they are the kind of car our panel of lenders finances every day for customers with poor or limited credit, rather than simply the lowest sticker price.
That is why two of the very cheapest new cars, the electric Dacia Spring and Leapmotor T03, are not on the list. Both are newcomers with very few used examples around yet, so the petrol and hybrid models below give budget buyers far more choice.
Prices are approximate starting points for new cars at the time of writing, and they change often. Used prices depend on age, mileage and condition, so treat the figures as a guide..
The 10 most affordable cars to get on finance
The list runs roughly from cheapest to most expensive new, though on the used market the gaps between them narrow considerably.
1. Dacia Sandero
The Sandero is the cheapest petrol car on sale in the UK, starting at just under £15,000 new. For that you get a genuinely roomy five-door hatchback with space for adults in the back and a decent boot, plus cruise control and parking sensors on the entry-level Essential trim. Dacia also sells a Bi-Fuel version that runs on LPG as well as petrol, which cuts fuel costs further if you have a filling station nearby.
The current generation arrived in 2021, so there are plenty of used examples at well below the new price. A low purchase price means a smaller amount to borrow, and that is the single biggest lever on your monthly payment.
2. Kia Picanto
Kia’s smallest car costs from around £17,000 new following a recent facelift. It is a proper city car, easy to park and light on fuel, but it feels more solid and grown-up than its size suggests.
The Picanto’s strongest card for budget buyers is Kia’s seven-year, 100,000-mile warranty, which transfers to the next owner. A three- or four-year-old Picanto can still have years of cover left, which takes some of the risk out of an unexpected repair bill landing on top of your finance payments.
3. MG3
The latest MG3 is sold as a full hybrid, from around £17,500 new, which makes it one of the cheapest hybrids you can buy. It is a supermini rather than a city car, so there is more room inside than in a Picanto or i10, and the hybrid system keeps fuel bills low around town.
MG backs new cars with a seven-year, 80,000-mile warranty. The previous petrol-only MG3 is also widely available used at very low prices, and it is one of the cheapest ways into a car of this size.
4. Hyundai i10
The i10 starts at around £18,400 new and is one of the most polished city cars on sale, comfortable on the motorway as well as in town. Running costs are modest, with small petrol engines and low insurance groups on the basic trims.
Hyundai’s five-year, unlimited-mileage warranty adds reassurance on nearly-new examples. The i10 is a popular first car and a common part-exchange, so there is a steady supply of used ones at dealers.
5. Citroën C3
The current C3, launched in 2024, costs a little under £20,000 new, with an electric version (the ë-C3) also available. Citroën has put comfort first, with soft suspension and supportive seats that make it one of the more relaxing small cars on a bumpy road.
Its taller, crossover-style shape gives an easy driving position, which suits drivers who find very small cars cramped. Earlier-generation C3s are plentiful and cheap on the used market.
6. Renault Clio
The Clio is one of Europe’s best-selling small cars, and new prices start at around £18,000 to £21,000 depending on version, with petrol and E-Tech full hybrid options. It is well equipped for the money and good to drive.
Because so many Clios are sold, there is an unusually wide choice of used ones at every age and budget, from recent hybrids to older petrol models that cost very little to insure. That supply works in your favour when you are shopping around for a car that fits your approval.
7. Vauxhall Corsa
The Corsa remains the UK’s biggest-selling traditional supermini, with new prices from around £20,000. It drives neatly, has a practical cabin and comes with petrol, hybrid and electric options.
Its popularity is exactly what makes it affordable second-hand. A four-year-old petrol Corsa can cost roughly half the new price, parts are cheap and almost every garage knows the car well, which keeps servicing costs down across the length of a finance agreement.
8. Skoda Fabia
The Fabia costs from around £21,000 new and is the most practical car here, with a boot big enough to rival cars from the class above. It is petrol-only, comfortable and simple, which suits drivers who do a lot of miles.
Used Fabias hold their appeal well but are widely available, and earlier generations are among the cheapest sensible small cars you can buy. If you need space for a family on a tight budget, this is the one to look at first.
9. SEAT Ibiza
The Ibiza shares its underpinnings with the Skoda Fabia and Volkswagen Polo, with a list price of around £21,000 new but regular dealer discounts that bring the real price down. It is sharper to drive than most small cars, and the rear seats have more room than you might expect.
On the used market it tends to sit a little below the equivalent Polo, so you get much of the same engineering for less money, and a smaller loan to repay.
10. Toyota Aygo X
The Aygo X is now sold only as a full hybrid, from around £21,600 new, which puts it at the top of this list on price. What it offers in return is very low fuel consumption and Toyota’s reputation for reliability, backed by a warranty that can extend up to ten years when the car is serviced at a Toyota dealer.
The earlier non-hybrid Aygo X, sold from 2022, is much cheaper to buy used and still easy on fuel. For drivers who want the lowest risk of big repair bills over a long finance term, either version is a strong choice.
Can you get cheap cars on finance with bad credit?
In many cases you can, and a budget car is often the easiest kind to get approved for. The less you borrow, the lower the monthly payment, and a lower payment is far more likely to pass a lender’s affordability check when your credit history is patchy.
Kandoo is a credit broker, not a lender. Our panel includes lenders who specialise in poor and limited credit, and they weigh your current income and outgoings more heavily than what happened on your file a few years ago. Entry-level cars like the ones above are exactly what those lenders finance every day, for customers with missed payments, defaults, a CCJ or an IVA.
Most cheap cars on finance with bad credit are arranged on hire purchase rather than PCP. Many lenders only offer PCP on newer cars above a minimum value, often around £10,000, and specialist lenders generally prefer HP because there is no balloon payment to risk-assess. Our guide to HP vs PCP with bad credit explains the difference in more detail.
We start with a soft search, which shows how likely you are to be accepted without affecting your credit score. A hard search only happens once you have chosen a lender and decided to go ahead. Approval is never guaranteed, and a lower credit score usually means a higher rate than someone with a clean file would be offered, so it pays to choose a car that leaves room in your budget. Our page on car finance with bad credit covers what lenders look for.
Check your eligibility in a few minutes, with no impact on your credit score.
Cheap cars on finance FAQs
What’s the cheapest car to buy on finance in the UK?
The Dacia Sandero is the cheapest petrol car on sale new, from just under £15,000, and the small electric Dacia Spring and Leapmotor T03 cost less still. On finance, though, the cheapest car for you is usually a used one, because a three- or four-year-old supermini can cost around half its new price and you borrow less as a result. The monthly payment also depends on your deposit, the length of the agreement and the rate you are offered, so the eligibility check is the quickest way to see real numbers.
Can I get car finance with bad credit on a budget car?
Yes, in many cases, and a budget car improves your chances because the smaller loan is easier to fit within an affordability check. Specialist lenders on our panel regularly approve customers with poor credit for cars like the ones in this list, usually on hire purchase. Approval depends on your circumstances and is never guaranteed.
Is it cheaper to buy a car outright or on finance?
Buying outright is cheaper overall, because you pay no interest. Finance makes sense when you do not have the full price saved, or when you would rather keep savings as a buffer for insurance, repairs or emergencies. If you take finance, a lower-priced car and the shortest term you can comfortably afford keep the total cost down.
Can I get one of these cars with no deposit?
Many lenders on our panel will consider finance with no deposit, including for applicants with poor credit, subject to status. Your monthly payment will be higher than if you put money down, and you will pay more interest over the term. Our guide to no deposit car finance explains how it works, and a part-exchange can act as your deposit if you have a car to trade in.
To see what fits your budget, browse our current stock or check your eligibility before you commit to a car.
Kandoo Car Credit is a credit broker, not a lender. All finance is subject to status and affordability.