Black Horse Car Finance: How It Works, Rates & Alternatives

Who is Black Horse?

Black Horse is a direct lender, not a broker. It provides the funds itself, usually for cars bought through a dealer, and is one of the larger motor finance providers in the UK, part of Lloyds Banking Group.

Because Black Horse lends its own money, the agreement is between you and Black Horse for its whole life. Payments, settlement figures, end-of-term choices and complaints all go to the lender, not the dealer. It must be FCA-authorised and run an affordability check before lending, like every UK motor finance provider.

Being part of a major banking group means Black Horse sits firmly in the prime-to-near-prime part of the market, typically lending to customers with reasonable-to-strong credit files.

Work out the true cost before you commit

Whatever a Black Horse agreement quotes, you can check the real cost yourself for free.

1. Take the deposit, term and APR from your Black Horse quote and run the numbers on the car finance calculator.
2. Read the total amount payable, then compare it with other deals on the APR calculator.
3. Model the deal type with our HP or PCP calculator.

What products does Black Horse offer?

Black Horse typically provides Hire Purchase (HP) and PCP through dealers, on new and used cars.

HP spreads the whole car price over the term so you own it at the end; there's no balloon. PCP keeps the monthly lower with the optional final payment (the balloon, set at the GMFV), but that lower monthly usually means a higher total amount payable over a longer term. The right choice depends on whether you want to own the car, keep the monthly down, or change cars every few years.

Because the finance is arranged where you buy the car, the dealer sets up the credit agreement and the lender funds it. The exact product, APR and term appear on your pre-contract document (SECCI) before you sign.

• Hire Purchase (HP): own the car after the final payment. Model it on the HP calculator.
• PCP: a lower monthly with an optional final balloon. Model it on the PCP calculator.
• Dealer-arranged: agreements are usually set up at the point of sale.
• New and used cars: both are covered, including cars, light commercial vehicles and motorbikes.

What rates and eligibility does Black Horse look at?

Your Black Horse rate depends on your credit profile and the car, not a single headline figure: the APR is set after a credit and affordability check.

A stronger credit file and a bigger deposit generally mean a lower APR and less interest overall. The representative APR a lender advertises must be offered to at least 51% of accepted customers, so up to 49% can pay more. Where you sit depends on your file, the car's age and the deposit.

Rather than rely on an advertised number, turn any quote into its real cost with our APR calculator, which shows the total interest in pounds. A longer term that looks cheaper per month can cost thousands more overall.

How Black Horse compares — your alternatives

Black Horse is one of several dealer-finance lenders; the cheapest option is whichever has the lowest APR over the shortest term you can afford.

Compare on the total amount payable, not the monthly. Check the figures on the main calculator before you decide.

The motor finance commission context

Black Horse is one of the lenders at the centre of the motor finance commission story: it used Discretionary Commission Arrangements (DCAs) before they were banned, and its parent group is not among the parties challenging the FCA's redress scheme.

Under a DCA, a dealer or broker set your interest rate within a range and earned more commission the higher it went, an incentive that was rarely spelled out. The FCA banned DCAs in January 2021 and, after a Supreme Court ruling, confirmed an industry-wide redress scheme in 2026 (PS26/3, 30 March 2026) covering agreements from 2007 to 2024. Black Horse hosts its own motor commission complaints page for customers who want to complain direct. Parts of the scheme have been suspended by the Upper Tribunal since 29 June 2026, pending a legal challenge to be heard 16 February to 3 March 2027. Until the legal process ends, lenders do not need to calculate or pay compensation, and payouts are expected in 2027 at the earliest, if the scheme is upheld and the judgment is not appealed.

Lloyds Banking Group, Black Horse's parent, is not one of the parties challenging the redress scheme: the challengers are CA Auto Finance, Mercedes-Benz Financial Services, Volkswagen Financial Services and Consumer Voice. If you have (or had) a Black Horse agreement from that period, undisclosed commission may have raised your rate. The scheme is free for consumers to use directly. You don't need a claims firm. Read whether your agreement could have been mis-sold and estimate any redress yourself, free.

Eligibility posture — prime, near-prime or sub-prime?

Black Horse sits firmly in the prime-to-near-prime part of the market, so the rate you're offered reflects how close your file sits to a mainstream banking-group appetite.

As the motor finance arm of Lloyds Banking Group, Black Horse typically lends to customers with reasonable-to-strong credit files. Where your file sits largely sets the band you land in, and that band shapes the rate you're offered for the same car on the same day.

What moves you between bands is mostly within your control before you walk onto the forecourt. A larger deposit cuts the amount borrowed, which both lowers the monthly and shrinks the total interest at any APR, and it signals lower risk to the lender, which can itself move you down a band. A shorter term does the same. Use our affordability calculator to see what deposit and term keep the monthly comfortable, so the dealer's first quote isn't your only reference point.

Read our bad-credit guide to see which tier your file is likely to fit before you apply.