Car finance options

Finance deals ensure that you can pay for your car with an affordable monthly fee. These are the different types of car finance options

Jul 25, 2018

More than 80% of people get a new car via some kind of finance agreement in the UK. And while it’s not for everyone, and of course it can be more expensive in the long run, car finance offers you the chance to get a new or nearly new car on your driveway for a manageable monthly fee.

People love the way that financing a car enables them to change cars regularly (typically every three years), while easily allowing it to be incorporated into their monthly budget. Many people even compare the simplicity with taking out car finance to getting a phone contract.

There are several different options, primarily PCP, HP, and PCH.

BuyaCar offers finance from a range of partner lenders to ensure that you get a competitive rate for your circumstances where possible. And even if you find a car elsewhere, BuyaCar can arrange finance at the same rates.

Car finance options: PCP

PCP, or Personal Contract Purchase, is the most popular way to finance a car. Your repayments only cover the value that the car is expected to lose during the length of your agreement, which is usually between two and five years.

Used cars are available for less than £100 a month, and at the end of the agreement, you can hand the car back with nothing more to pay, or, you can buy the car by refinancing, or making a one-off payment.
Read more about PCP

Car finance options: HP

Hire Purchase (HP) is a good type of finance if you want to own the car outright at the end of your agreement.

Generally for HP you put down a deposit (not always necessary though) and decide on the length of your contract. You then make monthly payments. The longer the term, the lower the payments will be. At the end of the contract you own the car, and you can choose to do with it what you wish.
Read more about HP

Car finance options: PCH

PCH, or Personal Contract Hire, is a long-term car rental agreement, which is also often referred to as leasing.

You pay an up front fee, then make monthly payments. Agreements tend to be a bit shorter than other finance deals, at between two and four years, and there’s no option to buy at the end. PCH deals tend to be the option with the lowest monthly payments too.
Read more about PCH


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