We know that car finance can be overcomplicated, and finding the best type to suit your needs and budget isn't as straightforward as it should be.
Our aim at Car Credible is to make car finance as simple as possible, so everyone that has - or wants to get - finance, knows exactly what to look for so they get the best deal available.
There are plenty of different options available to finance a car and it's therefore important that you know exactly what you're getting into before agreeing to the term.
Do you have a car on finance but aren't sure if your deal is a good one? Sign up to Car Credible today for your free deal appraisal.
Most deals will ask you to put down a deposit of sort, though, then you can agree on the fixed monthly repayments you wish to make over a period of time, typically 24-60 months.
Whichever type of agreement you go with will depend on your ownership of the car both now and in the end. Let's look at the various options available to you.
This is the most popular way to take out a car finance agreement in the UK.
It is ideal for those that want to change their car regularly and make lower monthly repayments.
It’s a variation of a Hire Purchase (HP) but instead of repaying the entire cost of the vehicle, you only pay for the depreciation of the car.
At the end of the agreement, you can choose to make the optional final payment (balloon payment) to own the car outright or hand the car back to the finance company with no further liability, provided you have taken care of the car and have not exceeded the mileage allowance.
This is another of the more popular and straightforward finance agreements. You don’t own the car until you have paid all sums due in terms of the hire purchase agreement. You are essentially paying in agreed monthly installments until you have paid the entirety of the total price.
The interest rate is generally fixed and you'll typically pay less of it over time because you are paying the total of the car off faster than you would in a PCP.
This is another increasingly popular way to finance a car. Rather than making repayments to a finance company that owns the car until you've made your payments, you take out a loan from a bank and own the car outright from the start.
You then make your monthly repayments to your lender with interest across a period of time that suits you, as you would on a PCP or HP, but you already own the car.
The interest rate you get offered will be dependent on your credit score and history, the length of time you want to make the repayments, and the lender you opt to go with.
This type of finance is great for someone that is happy to keep the same car for a longer period of time.
Sign up for free today to see the options available to you.