Car Finance Options

Purchasing a car on finance is quite frankly, like a minefield. There are so many options available to you and it can be confusing to know which plan is the best to go for. But after buying a house, buying a car can potentially be the second biggest investment you’ll make in your life. It’s a big commitment and not to be rushed into so take your time and shop around. But don’t even think about putting your money where your mouth is until you’ve read our simple guide to car finance first.


Car Finance Options – Hire Purchase
  • You pay an initial deposit
  • You pay the remainder in fixed monthly instalments (with interest)
  • You don’t own the car until you’ve repaid in full and note that you can’t sell the car before you’ve repaid the full amount either
Car Finance Options – Leasing
  • You choose how long you want your car for and agree mileage limit and pay monthly instalments
  • You don’t pay a deposit
  • You can’t buy the car at the end of the term but you can change or upgrade the vehicle
  • This option might work for you if you want to change your car frequently

Car Finance Options – Personal Contract Plan
  • New car showroomYou pay a deposit and pay monthly instalments
  • You then have three options. You either pay the balance and the car is yours, hand the car back to the dealer or trade the car in against a replacement from the same dealership
  • Always be truthful about the annual mileage you’ll be doing. If you want to hand the car back to the dealer at the end of the agreement, you may be charged a fee if you’ve gone over your pre-agreed mileage
  • These types of plans often come with items such as breakdown cover included so ensure that you check this.

Of course, another option is to take out a loan from an independent company, or bank, but always make sure that they’re reputable and don’t forget to shop around for the best rates, this does have the advantage of making you a cash buyer so helping your bargaining power.

It goes without saying that you should look closely at all of the terms and conditions before committing to such a big investment, as they differ from dealership to dealership. Happy car hunting!

  • Anna Vaccaro