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Is Financing the Best Option For You?

  • 22 Jun, 2022
Is Financing the Best Option For You?

Financing can be a tough decision to make, especially when you’re not fully knowledgeable on the topic, or if you’re unsure about whether it’s the best option for you or not. Luckily, we’re here to help you out.

Personal Loans

Personal loans are a great option if you’re looking to own the car outright, from the very start of your loan. Personal loans are also probably the cheapest option when it comes down to the final cost. This means the overall price of your car will be cheaper after the running costs are also considered.

If you take a look at a variety of different options when considering a loan, you’re more likely to get a competitive fixed rate. If you keep your options open, you can choose and be picky with which loaning company you decide to go for.

Personal loans are available from most banks and building societies, or if your credit rating is good enough, car finance provider. The cost is normally able to be set from one to seven years.

HP Finance

HP (Hire Purchase) Finance is a type of finance which enables you to buy a car. Once the loan is secured, a 10% deposit is required to secure the car. You will then make monthly payments over a certain period of time that is agreed between you and the lender.

One of the many concerns people have when using HP finance is that the car isn’t officially yours until the very last payment has been made. This is very important to consider when choosing which finance option is best for you. In some circumstances, once you’ve paid off half of the amount for your car, you can give the car back and not have to make any more payments (as long as the car is in perfect condition, of course).

The great thing about HP finance is that there are usually flexible payment contracts, between 12 to 60 months. However, the shorter your agreement is, the more expensive the payments you have to make may be.  

PCP Finance

PCP (Personal Contract Purchase) Finance is very similar to HP finance, in the fact that there are flexible repayment terms, low initial deposit, and a choice of what you’d like to do at the end of the repayment term.

Instead of having to pay out a loan for the full cost of the car, you will be paying the difference between the cost of the car being brand new, and the price it’s expected to be at the end of your agreement. If you fall in love with the car you’ve had over the time you’ve had it, PCP finance enables you to pay the resale value after you’ve finished with it, and the car is then yours!

However, PCP finance is a risky game if you don’t want to pay out any additional charges. From exceeding higher miles to excessive wear and tear, including any minor scratches.

Is Financing the Best Option For You?


PCH (Personal Contract Hire), is a type of finance that enables you to pay the dealer a certain amount each month to be able to use the car. This cost also covers any service and maintenance that might be required to be done.

Unfortunately, if you choose PCH finance, the car actually never belongs to you, which means you are obligated to give the car back after the payments have been made. There are still, however, flexible payment terms, and flexibility for you to be able to switch providers and the total cost works out cheaper overall.

One of the downfalls of choosing PCH finance is that the deposit is usually higher, with you having to pay 3 months of the rental price to secure the vehicle (yikes). You may also have to pay extra mileage costs if you exceed the limit, or want to end your agreement early.

Credit Card Payments

Many people like to choose their credit cars as a way to make payments. Not only are you in charge of your money, but you can also pay it back in your own time, as long as it’s agreed with the bank, of course.

Choosing your credit card as a way to finance all or part of your car, will give you more security if something ends up going wrong.

One disadvantage of using a credit card to pay is that some dealers may not accept credit cards as a form of payment. It’s important to do your research and make sure that they have the right finance option available to you.

Looking to buy a new car?

Take a look at our range of cars for sale available on our marketplace to start hunting for your perfect car. We’re partnered with over 750 dealers, so you’re bound to find your perfect match.

If you have any enquiries, get in touch with us today!

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