Car Finance

Car Finance

There are various options available in car finance. In order to get dream car of yours all you have to do is choose one of the options which suits you and which you can afford.

Listed below are some of the car finance options which you can make use of.


Hire Purchase (HP)

In Hire Purchase car finance you have to make an initial deposit (mainly 10% of the car value) and the rest car value you have to pay in monthly instalments. After making the final payment you get to be the official owner of the car.



  • You don’t have to borrow or spend your savings to pay for your dream car
  • The interest rate is fixed, this helps you to plan your monthly expenses
  • You can spread the value of the car over a particular period of time (mainly between 12-60 months)



  • The monthly payments of HP may be higher than any other form of car finance option like PCP.
  • You don’t get to own the car until you make all of your repayments
  • Unless you have settled the finance, you won’t be able to sell the car
  • You can be charged if the car suffers any kind of damage so maintain it properly

car finance

Personal Contract Hire (PCH)

Personal contract hire is the type of car finance in which you lease a car for an agreed period of time and when the contract expires you return the car. In the agreed period you have to make monthly instalments. This type of finance is suitable for you if you are not looking to buy the car at the end of your contract or if you don’t need to change it before your contract.

Advantages :

  • It has low initial payment
  • You would need to pay lower monthly payments if you are not looking to buy the car
  • At the end of the contract, you can return the car



  • There’s no option if you have to buy a car with this car finance option
  • You are given a monthly mileage allowance, if you exceed it you may be charged extra
  • If you decide to terminate your contract it might end up being expensive for you


Personal Contract Purchase (PCP)

Personal Contract Purchase is the same form of car finance option like hire purchase.  However, in PCP you have the option to keep the car or return it. If you decide to keep the car you have to make a final settlement payment after which you can own the car. This final settlement plan is also known as Balloon Payment or Guaranteed Future Value.


  • This car finance option has a lower monthly payment than any other types.
  • You can return the car at the end of your agreement without paying anything extra
  • If you want you can own the car at the end of your contract by making a balloon payment



  • The only way you can buy the car is by making your final settlement payment (Balloon payment)
  • You won’t own the car until you make the repayments
  • You cant sell your vehicle without settling finance first
  • You are given a mileage allowance just like in PCH finance, if you exceed it you might be charged extra


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