Luxury Car Finance

Owning a luxury car has never been more possible with a range of great car finance options available.

Most people would be lying if they said they didn't want to own a luxury car at some point in their life. From a top-of-the-range Ferrari to the elegance of a Bentley, affording a car like this is out of the question for many.

While most of us are happy with our Vauxhall Corsa or Ford Fiesta, luxury cars are out there, and people do own them. However, a lot of people will be wondering how they afford them.

Are they that rich that they can afford to pay for them outright in one transaction? Of course, many wealthy people can do that, but what about those who have always wanted to own a luxury car but can't buy it outright?

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It is possible to get car finance for cars worth hundreds of thousands of pounds, and it can help those that are interested in getting their hands on one be able to manage the payments.

In this article, we look at the options available for those thinking about buying a luxury car and the steps they need to take to get the best value in the deal they're entering.

Personal Contract Hire (PCH)

Personal Contract Hire (PCH) is a great option for those that want a super luxurious car but don't necessarily want to own it. By choosing this finance method, you are essentially leasing it for an agreed period, and once you've made all the monthly payments, you return the car.

It gives you the option to try a particular brand of car for a few years and hand it back when you've paid it off. Once you've done that, you could try something else that you've always fancied.

As there is no option to own the car at any point of the term, the monthly repayments are generally cheaper than if you were on a Personal Contract Purchase (PCP) or Hire Purchase (HP). The reason is that you are only hiring the car, not owning it.

Choose a long-term deal

If you choose a long-term deal, it will help to reduce the monthly repayments. Although that will mean an increase in the interest you pay, it gets spread across a much longer period.

You could get a PCH deal for up to seven years if you wanted to. That means a £100,000 vehicle gets paid over 84 months rather than 24-60 months on a traditional car finance plan.

However, if you were unsure about committing to a car loan for that long, a good middle ground is the four-year option, which is 48 months. That's generally the length most people on a PCP or HP go for.


Do your research

If you know there is a certain make or model that you fancy, you should consider researching the places that offer car finance for that particular vehicle. That way, you can compare the loans that each lender offers.

Some manufacturers will have special offers available throughout the year on particular models, especially if they have been harder to sell or the dealers have targets that they need to meet by a certain time.

While it's understandable for you to want to get into a luxury car as soon as possible, taking time to review deals and alternative options will help you get the best deal to suit your budget.

Hire Purchase (HP)

If you know you eventually wish to own the vehicle outright, you could opt for an HP agreement. This type of finance plan involves making fixed monthly payments until the end of the deal, at which point the car belongs to you.

With an HP, you should generally expect higher monthly repayments than on a PCH or PCP. You will also likely be asked to put down a deposit of around 10% of the vehicle's total price.

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The idea of owning a luxury car is a dream for most people, though it is often out of reach. If you have the budget and want to treat yourself, you should go ahead and do so. There will be plenty of deals for you to research before you make your decision.

If you are on the fence and are worried about how it would affect your other finances, then maybe now isn't the right time. Continue to build your savings and reassess when you're more comfortable with your assets.


Can I get a luxury car with no deposit?

It's not uncommon to be able to get a luxury car on finance without putting down a deposit, but it's generally at the discretion of the dealer or salesperson you are working with. A deposit signifies to a lender that you have the money to afford to make your repayments, which will be slightly smaller when adding a deposit upfront.

Should I take out a personal loan to buy a luxury car?

A personal loan can be used to buy anything. From home improvements to a wedding, you are entitled to do whatever you wish with the loan. You should consider how much you could be able to borrow based on your credit score and credit history before committing to a purchase. Some lenders will not allow you to borrow more than a certain amount of money.