With so many car finance options, choosing the best one can seem both daunting and overwhelming.

My Car Credit takes the mystery out of it all by helping you understand how each car finance option works, how much it will really cost you and which option best suits your finances.

Car Finance in a Nutshell

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Car finance allows you to become the owner of a car where you are unable to pay for your car upfront.

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You make affordable monthly payments directly to the agreed lender of your car finance.

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You will become the owner of the vehicle once you have paid the agreed amount in full.

Hire Purchase (HP)

Hire Purchase is the most common type of car finance and very simply means that you make monthly repayments and usually a small admin or purchase fee at the end.


Your car loan is secured against the car, which is owned by the lender. Whilst you are paying, you effectively hire the car from the lender and once all payments have been made the vehicle becomes yours.


Great for those people:

  • Who don’t want to or can’t pay cash
  • Who’s budget and circumstances suit fixed monthly repayments
  • Who have had problems getting credit
  • Who want to own the car at the end
  • Who’s disposable income might change (e.g. starting a family)

Personal Contract Purchase (PCP)

Personal Contract Purchase is similar to Hire Purchase except that you have the option to buy the vehicle at the end of the loan or hand it back.


If you decide to buy, you pay a balloon payment for the balance on the value of the vehicle. The value is fixed at the start of the agreement – the Guaranteed Future Value – so that you know and can budget for the balloon payment before you commit.


Great for those people:

  • Who want lower monthly repayments
  • Who want flexibility and options at the end of the agreement
  • Who like to change their car regularly
  • Who are confident that they can predict their mileage

Conditional Sale

Conditional sale is similar to Hire Purchase except that you don’t have to pay a fee at the end of the agreement, just monthly repayments.


Whilst you’re repaying the agreed amount of the car loan, you have possession and use of the vehicle but it continues to belong to the lender until you have made the final repayment, when the vehicle becomes yours.


Great for those people:

  • Who would rather pay a bit more, spread the fixed repayments and avoid a large payment at the end
  • Who want a choice of length of payment terms

Want an instant decision on car finance?