June 23, 2024

Car finance - what you need to know | Top10s

Published June 12, 2023, 1:20 p.m. by Bethany

A huge number of UK buyers choose to fund their dream cars through a finance deal. With so many ways to finance a car, how do you work out which works best for you? In this Top 10 guide, I sift through the acronyms to explain each of the methods available, and the pros and cons of each.

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if you're thinking about getting a

quorum finance then this karwa top ten

guide is here to help with everything

you need to know about the options

available with the help of these three

cars 80% of people buy a cold finance

now I'm saying buy because you don't

always actually legally own the car

during the term of the agreement the

finance company does however certain

types of finance do eventually pass over

ownership on to you once all the

payments have been made you can get some

form of finance on any age of card they

usually rates are more favorable on new

cars now that's because manufacturers

provide what's known as deposit

contributions essentially they reduce

the amount you have to pay up front as

an incentive to choose their car you

might want to buy a car with cash that

you've either saved or borrowed from a

bank and the advantage of that is that

you actually own the car from the outset

however the total purchase price will

usually be slightly more as often

dealers can give slightly better savings

when they sell a car on Finance


everything on carlão is authorized by

the financial conduct authority for

providing consumer finance whenever you

configure a car on carlo you'll get a

range of offers back from dealers and

you can pick the offer and the dealer

you like best and they'll be more than

happy to talk you through the available

finance options and costs what dealers

may offer larger statements for cars

solid finance due to the interest you

have to pay it can still work out more

expensive in the long run than buying a

car with cash also you should look out

for any penalties attached to the

agreement personal contract higher PCH

which is also known as leasing is a bit

like renting your house so you pay an

initial deposit to get access to the car

and then pay monthly for its use over

the period of the term which is usually

between one and three years and then at

the end you just give it back now this

route may be suitable if you change your

car regularly however you never actually

own the car and you may have to pay a

penalty if you do any damage or go over

any mortgage allowance


fire purchase which is also known as HP

is more like a repayment mortgage on

your house so you pay an initial deposit

and smaller monthly repayments over the

term of the agreement which is usually

between three and five years until you

repay the full amount plus interest once

you make the final payment you've

effectively paid for the whole car so

therefore legally owned it

now hire-purchase can be more suitable

if you want to keep your car for longer

and there's no penalty for damage or a

mileage allowance

however the monthly repayments are

slightly more because you're paying for

the whole car as well as interest

a personal contract plan also known as

pcp is a little bit like an

interest-only mortgage on your house so

you pay an initial deposit then smaller

monthly charges over the period of the

agreement and at the end you're given

the option to buy the car if you

actually want to own it if you don't you

just hand it back now

PCP may be suitable for people who want

to keep the options open however if you

do return the car at the end of the

agreement you may be penalized the only

damage you've done to it or for going

over a mileage allowance make sure you

know the APR of the finance bill is you

can use this to compare to other offers

also find out the value of and the

number of the monthly repayments and add

these to the initial deposit to work out

the total cost of the finance field

you're always in sight also you can see

my right and contract regulations

whenever you buy a car regardless of how

you pay for it however if you buy the

car on finance or it just pay for a

deposit with a credit card

you'll have the added benefit of being

protected by the finance company if

anything goes wrong with the car now if

you click evading at a car load up code

at UK for more detailed information on

buying a car on Finance and click on the

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