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Can You Get Cars on HP with No Deposit?

Man with car in front of car bought on HP with no deposit

Purchasing a new car can often feel like a tightrope walk, especially when you’re trying to balance the excitement of choosing your dream make and model with budget constraints. If you’ve been eyeing that perfect set of wheels but the upfront cost seems daunting, no deposit hire purchase could be a clever solution.

Designed to bypass the large initial deposit typically required for hire purchase (HP) agreements, no deposit plans can be a great way to secure the keys to a new car, without parting with a large sum of cash.

Want to know more? Let’s unpack the possibilities and perks of cars on HP no deposit to see if it’s the right move for you.

Understanding hire purchase (HP)

Hire purchase is a bit like the reliable workhorse of car finance options – simple, straightforward and with no unnecessary frills. One of the main features of HP car finance is that agreements end with you owning the car outright. The model splits the cost of your new or used car into manageable monthly payments over a period that you choose, usually one to five years.

The main difference from other plans, like personal contract purchase (PCP), is that you’re working towards ownership right from the start – every payment brings you closer to claiming those keys for good.

Why consider no deposit HP?

Traditionally, HP deals ask for a deposit, often around 10% of the car’s price. This is paid straight out of your pocket. It’s a fast track to car ownership, sure. But it’s also a fast drain on your savings. This is where no deposit HP options come into play, offering a lifeline to motorists who don’t have access to large sums of cash, or want to preserve their capital. Here’s a closer look at who no deposit hire purchase works for:

First-time buyers: Accelerate your journey to car ownership without the time delays associated with saving up a deposit.

Motorists with immediate needs: Get a car quickly, perhaps for a new job or unexpected family growth, without waiting to save enough funds.

Cash flow savers: Keep your savings intact for other life essentials or unexpected expenses.

Top benefits of no deposit hire purchase

Purchasing cars on HP no-deposit plans can be a great option for all kinds of motorists, from first-time buyers to motorway veterans. Here’s a closer look at some of the top benefits of HP with no deposit.

Fast access to a car: Jump straight into the driver’s seat without saving for the initial lump sum. This is car finance, in the fast lane.

Maintain cash flow: Avoid the upfront financial hit and keep your budget breathing easy. No deposit hire purchase gives you more freedom to manage monthly expenses or even splurge on a road trip or two.

Better car options: With no deposit to factor into your budget, you may be able to afford a car with a few extra bells and whistles. For example, a model with the latest infotainment technology, or something with a fuel-efficient hybrid engine.

Predictable budgeting: Fixed monthly payments mean no surprises. You’ll know exactly what you need to pay each month for your car, making it easier to budget for everything from rent and groceries to holidays and entertainment.

Clear path to ownership: Once the final payment is made, the car is all yours. No balloon payments, no residual value calculations and no hidden costs. Just your car, your way.

Things to consider

While no deposit HP sounds like a dream, it’s not without its considerations. Here’s what to keep in mind when shopping around for cars on HP with no deposit.

Higher monthly payments: With no deposit HP agreements, you’re spreading the entire cost of the car across the payment period, with no deposit to reduce the monthly instalments.

Total cost of borrowing: Financing the full purchase price of the car usually means paying more interest over time. It’s worth doing the maths to see how it tallies up against a deposit-based deal.

Credit score impact: Good credit is often crucial for securing a no deposit deal. This is because lenders take on more risk when they don’t collect an upfront payment.

Securing a no deposit hire purchase agreement

Ready to proceed with a no deposit hire purchase agreement? Here’s how to get started in three easy steps:

1. Compare lenders

Not all lenders offer no deposit options, so shop around for those that do. You’ll also see variation between interest rates, terms, conditions and other variables, so it’s worth doing your research to find the right fit.

2. Credit check

Make sure your credit score is in good shape to improve your chances of approval for cars on HP no deposit.

3. Understand the full terms

Before signing on the dotted line make sure you understand all the details, from interest rates to payment schedules. This will help ensure there are no surprises down the road.

Find no deposit hire purchase deals with My Car Credit

With myriad benefits on offer, a no deposit hire purchase agreement could open up new possibilities for managing your finances while securing the car you’ve been dreaming of. No deposit plans are about more than just convenience. They’re about making smarter choices that align with your lifestyle and budget. Whether you’re upgrading from an older model or venturing into car ownership for the first time, HP with no deposit is worth a closer look.

Ready to take the next step? Check out our car finance calculator to get the wheels moving on your next car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

Financing a Second-Hand Car: 4 Options

Friends going on a trip in a red car bought using car finance

It’s never been easier to find car finance for nearly new or used cars. Choosing to purchase a ‘new to you’ vehicle has many advantages. You’ll be able to split the cost of your vehicle into a series of affordable monthly instalments, potentially affording a better set of wheels than you would otherwise be able to. Plus, you’ll be improving your overall credit score.

But what options are there for financing a second-hand car? We break down how My Car Credit can help you to get behind the steering wheel of a nearly new or used vehicle below.

How to finance a used car

Used car finance is a catch-all term for car finance agreements that allow you to borrow money against a used or nearly new vehicle.

Remember to always do your research before purchasing a new or nearly new vehicle. You want to make sure that you’re in the know about everything from the vehicle’s condition through to its remaining warranty (if relevant), and its service history.

There are different kinds of car finance agreements that you can choose for your used car. The right deal for you will depend on your unique needs and circumstances.

It’s worth comparing the different kinds of used car finance available, so that you can make an informed decision and choose the right agreement for you. That way, you’re not forking out for anything you don’t need.

Financing a second-hand car – 4 options

Hire Purchase (HP)

HP used car finance is our most popular agreement. With HP, you can pay an initial deposit, followed by a series of monthly instalments. This initial deposit isn’t always necessary, but paying it means you’ll have lower monthly payments.

Your monthly outgoings are fixed, giving you greater budgetary control. You won’t face a final balloon payment, and will own the vehicle at the agreement’s end. Plus, you also won’t face mileage limits, or fines for excessive wear and tear.

HP used car finance is best for those looking to own their vehicle at the end of the agreement, and who’d benefit from no usage limitations. You will be expected to make higher monthly payments compared to other finance agreements.

Personal Contract Purchase (PCP)

With PCP, you’ll pay a deposit and regular monthly payments against your used or nearly new vehicle. These monthly payments are lower compared to other agreements (like HP) because you’ll pay a final lump sum (balloon payment) at the end of the agreement. This allows you to completely own the car. Alternatively, you don’t have to make the balloon payment and can hand the car back providing the car is in good condition and within the contracted annual mileage.

Personal Contract Hire (PCH)

PCH car finance can also be referred to as a lease agreement. Essentially, you’re renting the vehicle for a long-term period of time, before handing it back to the dealership. You’ll pay an initial deposit and can also benefit from features like breakdown and road tax coverage.

PCH used car finance is only suitable for those with good or excellent credit scores, who aren’t looking to own the car at the end of the agreement. You’ll also face charges if you exceed mileage limits or cause excessive damage.

Personal Loan

With a personal loan, you’ll borrow the full amount of the used or nearly new vehicle, paying this off via monthly repayments. Essentially, you’re buying the car outright, and you own it from the beginning of the agreement. This means that you can always choose to sell it any time after purchasing it.

A personal loan is the simplest financing option for a second-hand car, but is only suitable for those with a good credit score.

Is financing a second-hand car right for me?

There are many benefits to financing a second-hand car. You’re spreading the cost of what can be a very expensive purchase, potentially affording a nearly new vehicle that would be beyond your budget if you were buying outright. Plus, by making your monthly repayments according to schedule, you’ll improve your overall credit rating.

As with any finance agreement, if you fail to make your repayments, you’re at risk of losing the vehicle and negatively impacting your credit score.

Find out more about financing a second-hand car

Check out our post to find out more about your used car finance options. We also have a car finance calculator to help you do the maths on your next vehicle purchase.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

How Does Auto Finance Work?

Who is the Legal Owner of a Car on Finance?

How Does Car Finance Work in the UK?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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What is the Oldest Car a Bank Will Finance?

Love the charm and character of older cars but unsure about whether they’re eligible for finance? In this hands-on guide we’ll answer “what is the oldest car a bank will finance”. Our goal – to help you get behind the wheel of a car with its own unique story to tell.

The golden numbers

While there’s no hard and fast rule about what the oldest car a bank will finance is, 10 years is generally considered the maximum age for standard agreements. Most high street banks require cars to be no more than 10 years old, with no more than 100,000 miles on the odometer.

Exceptions to the rule

While 10 years and 100,000 miles are considered the maximums for bank-funded auto finance, there are some exceptions to the rule. For example, classic cars are often eligible for finance agreements. What’s the difference between ‘classic’ and ‘older’ cars? There are similarities between the two, however most banks see them as very different candidates for auto finance.

Defining a ‘classic’ car

According to HMRC, classic cars must be at least 15 years old and have a minimum value of £15,000. This is ultimately what sets classics apart from older vehicles. Unless the car meets these prerequisites, banks will generally be reluctant to approve auto finance.

Prefer the gleam of a newly polished hood ornament over the glow of a next-gen touchscreen dashboard? You’re not alone. The UK is a nation of classic car enthusiasts, with the latest stats from the Federation of British Historic Vehicle Clubs (FBHVC) revealing there are more than 1.5 million classics currently registered in the UK.

Dreaming of securing the keys to a pristine pre-war Bentley or a British-built Lotus Elise? Read on to find out more about what the oldest car a bank will finance is and how auto loans work for classic vehicles.

Understanding classic car finance

Unlike traditional auto loans, classic car finance operates within a niche market. Agreements are often tailored to meet the unique needs of vintage automobile enthusiasts, which means financing a classic car can be a little different from the usual process.

Factors influencing classic car finance

Several factors come into play when determining the oldest car a bank will finance. These can include:

Age of the vehicle

One of the first variables banks assess is the age of the classic car. What is the oldest car a bank will finance? While there’s no set rule on the maximum age of a vehicle eligible for financing, most banks tend to favour classics from the post-war era onwards. That said, some specialty lenders may extend financing for exceptionally rare or historically significant vehicles, regardless of age.

Condition

The condition of the classic car plays an important role in securing financing. Banks are more likely to finance well-maintained or meticulously restored classics with documents to back up their past.

Rarity

Rarity, historical significance and desirability among collectors can increase the likelihood of securing finance for older vehicles.

Appraisal and valuation

Before extending financing for a classic car, banks often request a comprehensive appraisal and valuation of the vehicle. This helps determine the market value, authenticity and overall condition of the classic car. Why does this matter? It helps provide banks with confidence in the value of the asset they’re financing and potential resale value.

Types of classic car financing

Classic car financing options vary depending between lenders, so it’s important to do your research and find the right fit. Banks generally take a more conservative approach to finance and stick with popular options like Hire Purchase and Personal Contract Purchase.

Hire Purchase (HP)

This option sees you make a deposit upfront, followed by fixed monthly payments. These payments cover the full purchase price of the classic car, plus interest. Once the final payment is made, legal ownership of the vehicle is transferred to the borrower.

Personal Contract Purchase (PCP)

PCP offers lower monthly payments than HP, as you effectively lease the classic car for a set period of time. At the end of the agreement, you have the option to return the vehicle, trade it in for a different model, or make a balloon payment along with and option to purchase and possible admin fees, to take ownership.

Personal Loans

Personal loans can be a good way to finance a classic car purchase and provide lump-sum financing for the total cost of the vehicle. In exchange, you’ll commit to fixed interest rates and repayment terms.

Navigating your classic car finance journey

From sleek Jaguar E-Types to James Bond-worthy Aston Martins, classic cars are genuine head turners. However, complications can arise when attempting to secure finance. Here are some expert tips on how to improve your chances of success.

Research and due diligence

Before approaching a bank for classic car financing, take the time to thoroughly research the make, model and historical significance of the vehicle. Gather as much documentation as possible, including appraisal reports, maintenance records and ownership history. The more documents you have to support your finance application, the better!

Consider specialty lenders

Feeling disheartened after your application for auto finance has been knocked back? Remember, the buck doesn’t necessarily stop with high street banks. Consider working with a broker like My Car Credit to unlock access to specialty lenders with experience financing classics. Unlike banks which often adopt a conservative and inflexible approach, brokers work with a wide range of lenders, including lenders willing to finance vintage automobiles.

Insurance requirements

Your classic car financing agreement may come with specific insurance requirements to protect the value of the asset and minimise risk for the lender. For this reason, many lenders will insist you have comprehensive classic car insurance in place before finalising the agreement.

The bottom line on financing old cars

Ultimately, there’s no definitive answer to “what is the oldest car a bank will finance?” That said, there are some benchmarks to keep in mind. Banks will generally knock back applications for auto finance if the car is more than 10 years old, with more than 100,000 miles on the odometer. Unless the car qualifies as a ‘classic’, which means it must be at least 15 years old and have a minimum value of £15,000.

Secure the keys to a classic with My Car Credit

Got your heart set on a classic car? Whether you’re dreaming of a mid-century Chevrolet or a Mini in mint condition, My Car Credit is here to help you enjoy the thrill of vintage motoring. We work with a large panel of lenders to maximise your chances of success, with classic car finance options including high street banks as well as non-traditional lenders.

Try our handy online finance calculator to find out more about your options.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Why Does Car Financing Take So Long?

Financing a Second-Hand Car: 4 Options

Is There a Maximum Age Limit for Car Finance?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance car finance options classic car hire purchase hp Jan24 lenders PCP used car

Car Finance or Personal Loan – Which is Best for You?

Couple comparing Personal Loan and Car Finance

Millions of new and used vehicles are purchased using finance every year in the UK. When securing funds, most motorists choose between two popular options – car finance or personal loan. Both are designed to get you behind the wheel of your dream car, though each option has its own pros and cons.

Car finance: options and ownership

Car finance is an umbrella term used to describe several types of auto loans, including options like Hire Purchase (HP), Personal Contract Purchase (PCP), Personal Contract Hire (PCH) and Conditional Sale. Each option is slightly different in terms of deposits, monthly payments, legal ownership and end-of-term options.

Pros of car finance:

Lower initial costs: Initial deposits are generally lower for car finance, compared to purchasing a vehicle outright. This can be an advantage if you want to retain capital and keep your upfront expenses as low as possible.

Flexibility in ownership:

What’s more flexible, car finance or loan? Depending on the type of agreement, car finance generally offers options at the end of the term, including owning the car outright or upgrading to a new model.

Access to new models: Car finance options like Personal Contract Hire are designed to get you into the driver’s seats of the latest models. The chance to drive newer or more expensive models that may otherwise be outside your budget is a major benefit for some motorists.

Maintenance included: Some car finance options include maintenance packages which takes the stress out of ownership.

Cons of car finance:

Monthly payments: While monthly payments may be lower, they accumulate interest over time which can increase the total cost of your loan.

Ownership delays: With some car finance options, you don’t own the car outright until the final payment is made. This can be an important factor when deciding between car finance or personal loan.

Personal loan: simple and straightforward

A personal loan sees you borrow the full amount needed to purchase a car outright. You drive away as the legal owner of the vehicle and make monthly repayments to your lender to cover the cost of the loan, plus interest.

Pros of personal loans:

Instant ownership: With a personal loan, you own the car from day one. For many motorists, this makes the car finance or loan decision easy.

No mileage restrictions: Unlike some car finance agreements which come with mileage restrictions, personal loans give you the freedom to drive as much as you like without worrying about penalties.

Cons of personal loans:

Higher interest rates: Unless you have a stellar credit score, personal loans can come with higher interest rates compared to some car finance options.

Strict eligibility criteria: Securing a personal loan generally requires a good credit score, and eligibility criteria can be more stringent.

Higher initial costs: Personal loans often call for larger upfront payments.

Enjoy tailored auto finance with My Car Credit

Need help deciding between car finance or loan? Want to find out if car finance is easier to get than a loan?

At My Car Credit, we appreciate that every motorist is unique. That’s why we work with every client to build tailored financing solutions to match your budget, personal preferences and ownership goals.

Give us a call on 01246 458 810 to find out more about car finance options or email us at enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Can You Modify a Car on HP Finance?

Can You Pay Monthly for a Used Car?

How to Refinance a PCP Balloon Payment

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance credit score hire purchase hp Jan24 lenders new car personal loan used car

What is Hire Purchase? – Simple HP Explanation

Someone reseacrching what Hire Purchase is on a phone

Whether you’re eyeing a brand-new Nissan Qashqai or a used Volkswagen Golf, hire purchase (HP) is one of the most popular auto financing options in the UK, up there with personal contract purchase (PCP). The model allows you to spread out the cost of car ownership over time and secure the keys to your dream car, without hefty upfront costs.

You’ve probably come across the term when researching automotive finance options. But what is hire purchase exactly, and how does it pave the way to affordable, stress-free car ownership? In this guide, we’ll unpack everything you need to know about hire purchase, breaking down all the moving parts so you can navigate the auto finance landscape with confidence.

Hire purchase explanation

Hire purchase is a finance option that combines the benefits of car ownership with the practicality, affordability and predictability of structured payments. It’s one of the simplest types of auto finance and spreads out the cost of the car, plus interest, over a set period of time, usually between one to five years.

Think of it as a well-planned road trip. You get to enjoy the ride but instead of absorbing the entire journey cost upfront, it’s broken down into manageable pit stops, i.e. monthly payments.

How HP agreements work:

Choose your car

This is the fun part and involves researching vehicles, scheduling test drives and choosing your dream car. It’s always a good idea to crunch your number before you start the search to get an idea of how far your budget will stretch and what types of vehicles you can realistically consider.

Make an initial down payment

Most HP agreements start with a down payment, though this isn’t always essential. That said, it’s generally in your best interest to make an initial deposit as it will help bring down your total loan balance and minimise your monthly payments, as well as interest costs. If you already own a car, trade ins can be a great way to raise cash for a deposit.

Monthly instalments

After making a deposit, the remaining cost of the car is spread out across fixed monthly instalments. These payments cover both the cost of the car and interest applied by the lender.

Ownership

Unlike personal contract hire (PCH) where you hand back the keys at the end of the agreement, hire purchase steers you towards full ownership. Once the final payment is made, the car becomes yours outright.

Hire purchase explained: a closer look at the benefits

Easy, affordable and predictable, it’s no wonder HP is one of the most popular auto finance options in the UK. Here’s a little more information to help explain what hire purchase is and why the model wins over so many Brits:

Budget-friendly beginnings

Thanks to affordable down payments, hire purchase allows you to kickstart your car ownership journey without depleting your savings. This sets you up for success on the road to car ownership.

Predictable payments

Monthly HP instalments are fixed which makes budgeting easy. No surprise expenses, just predictable monthly payments.

A road to ownership

One of the top benefits of hire purchase is the option to own at the end of the agreement. After your contract has expired, the car is yours to keep.

Flexibility

Whether you’re eyeing a zippy commuter, sleek convertible or family-friendly SUV, hire purchase offers loads of flexibility when it comes to makes and models. You’re free to choose a vehicle that best suits your budget, lifestyle and driving preferences.

New or used

Can you use hire purchase for a used car? Absolutely! As well as the flexibility to choose different makes and models, HP agreements offer the freedom to finance new or used vehicles. Auto finance isn’t just for showroom cars. Analysts estimate a huge 1.5 million used cars were financed by British motorists in 2023, with agreements worth £23 billion. The trend is set to continue in 2024 as Brits continue to use HP agreements to fund used car purchases.

Factors to consider when opting for Hire Purchase

Now you know more about what hire purchase is and how the model works, let’s take a closer look at some important factors to consider before committing to an agreement.

Understand interest rates

Like any financial agreement, it’s important to understand the interest rates applied to your hire purchase deal. Over time they will have a big impact on the total cost of your loan.

Evaluate your budget

While hire purchase makes car ownership accessible, it’s essential to carefully evaluate your budget before committing. Crunch your numbers to ensure your monthly instalments align with your financial situation.

Check for early repayment options

Some HP agreements allow for early repayment, an option that can potentially reduce the overall cost of your loan.

Factor in depreciation

All cars depreciate over time and vehicles financed using HP are no exception. Be sure to factor this into your decision making process if the value of the car at the end of your HP agreement is important.

Start your journey to ownership with My Car Credit

If ownership is your ultimate goal, hire purchase could be your ticket to ride. As covered in our hire purchase explained guide, the format is easy to understand and offers lots of flexibility when it comes to makes and models. Plus, you’ll enjoy the stability of structured payments which takes the stress out of budgeting.

At My Car Credit, we’re committed to helping Brits secure the best auto finance deals, including Hire Purchase agreements. Contact us today to find out more about how to qualify for HP finance and kickstart your journey to car ownership. Our friendly team is always happy to chat, answer questions and give you the full hire purchase explanation.

As well as hire purchase, we specialise in industry-leading deals on other car finance options, including popular models like personal contract purchase (PCP) and personal contract hire (PCH).

Give us a call on 01246 458 810 or email us at enquiries@mycarcredit.co.uk to find our more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Is There a Maximum Age Limit for Car Finance?

How Do Car Finance Calculators Work?

What is the Oldest Car a Bank Will Finance?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car finance credit score hire purchase hp Jan24 lenders new car used car

Leasing a Vehicle vs Financing: What’s the Better Option?

Red sports car bought on finance driving down the road

Leasing a vehicle vs financing it – what’s the actual difference? Car finance and leasing are two of the most popular kinds of auto loan agreements available. While both offer routes to vehicle ownership, they have unique pros and cons.

In essence, when you’re leasing a vehicle, you’re renting the car with no ownership option at the end of term.

Financing a vehicle involves making monthly payments towards ultimate ownership.

Whether you’re a new driver scoping out options by which to fund your first set of wheels, or you’re business owner looking for clarity on the difference in leasing and financing a car, this guide’s here to help.

In fact, here’s a handy table breaking down the differences between leasing a vehicle vs financing it:

	Leasing	Financing
Ownership	No – at the end of a lease, you hand back the keys	Options to own the car once all repayments (plus interest) are made in full
Costs	Low upfront costs compared to financing a car Lease cars are also often covered by a manufacturer’s warranty, saving you money on repairs/maintenance	Higher monthly payments Maintenance and repair costs, as you’re responsible for the vehicle’s upkeep
Flexibility	Less flexibility compared to financing – you can’t customise your vehicle, and you can face restrictions like mileage limits and penalties if you hand the car back with unreasonable wear and tear	Freedom to customise the vehicle as you want No mileage or usage restrictions (with some financing agreements)

What does it mean to lease a car?

If you’re leasing a car, it’s like a long term rental. You’re making monthly repayments to the lender for full use of the car, which you then return at the end of the agreement.

One of the main attractions of a lease vs finance car is ownership. When you lease a vehicle, you return it at the end of term, giving you the flexibility to switch to a new car every few years.

What’s more, you can benefit from lower monthly payments when leasing a vehicle vs financing it. Plus, a lease car is often covered by a manufacturer’s warranty, meaning you won’t face maintenance or repair expenses.

However, with a leased car, you’ll also face mileage restrictions, and can be subjected to financial penalties if you return the car in less than good condition, or if you need to end the agreement early.

What does it mean to finance a car?

There are plenty of flexible, affordable car finance options for drivers with different circumstances and needs. Two of the most popular agreements are Hire Purchase (HP) and Personal Contract Purchase (PCP).

Hire Purchase (HP)

HP is one of the most popular and simplest kinds of car finance agreements. Your monthly repayments cover the entire cost of buying the vehicle, plus interest payments. You won’t face an optional balloon payment, so you’ll own the car outright at the end of the agreement. HP is an affordable and practical car finance agreement.

Personal Contract Purchase (PCP)

Personal Contract Purchase (PCP) offers low monthly payments, flexibility and the option to drive a new car more often. Unlike HP, at the end of a PCP contract, you have the option of making a final balloon payment to secure full ownership of the vehicle. PCP is a flexible car finance agreement for drivers with different financial circumstances.

Ultimately, both HP and PCP are like mortgage agreements – but for cars. You’ll make monthly payments that contribute towards ownership, and can benefit from options to keep, upgrade or trade in your vehicle at the end of term. You’ll face higher monthly payments if you finance a car compared to leasing, but financing can ultimately lead to asset ownership, building equity.

Key Difference in Leasing and Financing a Car

Ownership

Leasing – you’ll never own the vehicle at the end of term

Financing – you have options to either keep or trade in and upgrade your vehicle at the end of term

Payments

Leasing – you’ll cover the cost of vehicle depreciation in your leasing repayments, benefitting from lower upfront costs and monthly payments

Financing – you’re paying off the full value of the vehicle in a car finance agreement, so will have higher monthly payments compared to leasing, but you build personal equity with every payment

Flexibility

Leasing – less flexibility: you’ll face mileage restrictions and penalties for causing more than fair wear and tear on a vehicle, and can’t customise it to your needs

Financing – more vehicular freedom and flexibility

Which is cheaper – leasing or financing a car?

There are key cost differences when leasing a vehicle vs financing it.

With leasing, you’ll benefit from lower monthly payments. However, you’ll never own the vehicle, so there’s no investment or opportunity to build equity.

Financing agreements have higher monthly payments than leasing. However, you’ll benefit from building long-term value, and some agreements give you the option to fully customise the vehicle as you see fit.

When evaluating the cost of a lease vs finance car, you need to evaluate the total cost of ownership, your preferences for owning and customising a car, whether you can face mileage and usage restrictions and consider whether you’re looking to acquire a valuable asset.

Pros and cons of leasing vs financing

Leasing – pros

Lower monthly costs
Regularly switch up your vehicle to a new one
No resale hassle

Leasing – cons

No ownership
Mileage and usage limits
Can face end-of-lease charges
Not building asset acquisition

Financing – pros

Path to ownership
No mileage or usage caps with some agreements
Asset acquisition that you can later sell

Financing – cons

Higher monthly costs (including maintenance and repairs)
You cover the car’s depreciation

Leasing vs financing: which is better for you?

There’s no straight answer as to whether leasing a vehicle vs financing it is best for you. It depends on your circumstances, as well as what you want from car ownership. Let’s consider the benefits of a lease vs finance car for different driver profiles:

If you’re a student or young driver, leasing a car is a more affordable path to car usage. However, car financing builds towards asset ownership, which is a great way to build equity.

Alternatively, car financing gives long-term stability for families looking to secure and eventually own the next set of wheels.

But if you’re a business owner, car leasing may be a more tax efficient means by which to have a company car.

Lease vs finance car deals

There’s no one-size-fits-all approach when it comes to leasing a vehicle vs financing. The right agreement for you depends on your motoring needs and personal circumstances.

If you’re leaning towards car financing, My Car Credit gives you access to one of the UK’s widest panels of lenders, helping you to secure a suitable deal that fits you.

Use our car finance calculator to discover the kind of car finance agreement you could access, or contact our friendly team for expert advice.

Leasing vs financing FAQs

Is leasing the same as renting a car?

Leasing a car is much like a long-term rental. You’ll benefit from lower monthly payments compared to car financing, and get to hand the vehicle back at the end of your agreement, allowing you to regularly switch up your next drive.

Can you buy a car after leasing it?

There’s no option for car ownership on a leasing agreement. If you think you might want to own the car at the end of term, a car finance agreement is more likely to be suitable for you.

Is financing a car better for bad credit?

If you’ve got poor credit, car leasing can be more difficult to secure. Companies like My Car Credit can work with individuals of all credit profiles to help secure the most appropriate poor credit car finance for your circumstances – without judgement.

Can I get out of a lease or finance agreement early?

Provided you’ve met certain conditions, you can return your financed car to the lender through the voluntary termination process. If you end a car lease early, you could face a penalty for doing so – this figure will be specified in your contract.

Which is more flexible if my circumstances change?

A car financing agreement is more flexible if your circumstances change, as you have the opportunity to end the agreement early by paying the voluntary termination figure. Lease agreements can have substantial penalties you’ll need to pay for ending an agreement early.

Is PCP the same as leasing?

PCP is a type of car finance deal that differs from car leasing. When you lease vs finance a car, you’re essentially benefitting from a long-term rental, whereas PCP has ownership options at the end of agreement.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Am I eligible for car finance?

PCP Term: Everything You Need to Know

What Is PCP Car Finance? A Simple Guide to Personal Contract Purchase

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Can You Pay Monthly for a Used Car?

Opting for monthly payments is one of the smartest decisions you can make when purchasing a used car. Many Brits think payment plans are just for new vehicles and as a result, don’t ask “can you pay monthly for a used car?” when shopping for a second-hand ride. This is a big faux pas as car finance offers some fantastic benefits; when done right.

Want to know more? Read on as we answer all your questions about can you pay monthly for a used car.

Scenarios where used car finance steps up

Below, we explore some scenarios where used car finance can step up as a great purchasing option:

You want to stretch your budget

With the latest research from Auto Trader revealing the average cost of purchasing a used car in the UK is whopping £18,000, even second-hand vehicles are out of reach for many Brits. If you think this sounds high, you’re probably not alone. Over the past year, the typical cost of a pre-owned vehicle has increased by around £4,000. Large, family-friendly models are the most coveted, though the drastic price increase of almost 32% has hit all vehicle types.

If you’ve got a healthy deposit but can’t afford to pay the full amount in cash, car finance can help stretch your budget. It’s not about biting off more than you can chew and splurging on a vehicle you can’t afford. Instead, car finance can be a clever alternative to get behind the wheel of a used car within your budget, only faster.

Crunching the numbers is important, so take the time to factor in variables such as your budget, cash deposit, preferred loan term and your credit score, which can affect the interest rates you’re eligible for. Our cost of car finance calculator is a great place to start.

You want to boost your credit score

Committing to monthly payment plans, such as a car finance loan, can be a great way to boost your credit score. If a big financial move like applying for a mortgage or increasing your credit card limit is on the horizon, car finance can be a great way to improve your reputation as a borrower and prove to lenders that you’re a responsible applicant.

You want to be a competitive buyer

Factors like the global semiconductor chip storage, supply chain issues caused by the pandemic and conflict between Russia and Ukraine have hit the used car market hard. According to Richard Walker from Auto Trader, “the speed in which used cars are selling has also accelerated significantly, with the average car taking 11 days fewer to leave forecourts in February 2022 when compared to the same period last year.”

Demand for used cars is high which means you’ll likely face competition from other buyers. Car finance can help you make a realistic offer on a used car and give dealers the peace of mind that payment is guaranteed.

Understanding loan types for used cars

As a used car buyer, you enjoy the same auto loan options available with new models. These include:

Personal contract purchase (PCP)

PCP loans are one of the most popular ways to pay for used cars. Offered by car dealerships and independent lenders, they allow you to spread out payments for your vehicle over three to five years. You may need to make a cash deposit but options are available without.

Payments are calculated using the price of the car, the interest rate (APR) of your loan and most importantly, the expected depreciation rate of the vehicle. Your lender will calculate a guaranteed minimum future value (GMFV) and at the end of the loan, you’ll have the option to make a ‘balloon payment’ equal to the GMFV to keep the car. Alternatively, you can use the GMFV to fund a new PCP agreement.

Personal contract hire (PCH)

PCH loans are another great way to get into the driver’s seat of a used car faster. Also known as car leasing, you pay a cash deposit, then continue to make monthly payments for the duration of the lease term. Most agreements span for between two and five years, with longer terms translating to lower monthly instalments. At the end of the contract, you’ll give the car back to the dealer.

Hire purchase (HP)

As the name suggests, HP loans see you ‘hire’ a vehicle for a fixed period, usually between one to five years. You may need to make a cash deposit, but no-deposit options are available, then continue to make monthly instalments over the course of the loan. At the end of a HP plan you’ll have the option to take ownership of the car by paying a transfer fee.

Personal loan

If you want to own your car outright, a personal loan can be a good way to boost your budget. A lender will agree to a fixed sum, which you’ll use to purchase a used car. You’ll then repay the loan in monthly instalments, usually spread out over a year or more. Generally, the higher your personal loan, the lower your APR will be.

Can you pay monthly for a used car?

The final verdict on whether you can pay monthly for a used car? Absolutely. Auto finance can be a terrific way to pay for a used car, with different benefits appealing to different buyers.

Ready to get behind the wheel of your dream used car? Whatever your budget or credit rating, we’re here to help. With access to one of the biggest panels of lenders in the UK, we have the connections to secure you the best possible deals on finance for used vehicles.

You can calculate car finance and apply without impacting your credit score. Alternatively, get in touch by email or give us a call on 01246 458 810 to find out more about how can you pay monthly for a used car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Why Does Car Financing Take So Long?

How Does PCP Work at the End of the Term?

8 Advantages and Disadvantages of a Balloon Payment

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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No Deposit Car Finance – How Does it Work?

New car bought with no deposit car finance

You’ve fallen in love with the perfect dream car, it’s ready to go and you’re raring to drive it straight off the forecourt. Only one problem remains – paying for your new wheels.

Car finance offers the perfect solution for buying the car of your dreams without needing to use your savings and pay in one go. You get the option to pay your car off in manageable monthly payments, over a period of your choice.

However, some people do worry about needing to find a deposit. This is typically a large chunk of the overall payment and if you do not have a car to trade in, it can be unaffordable for some.

Luckily, you can now get car finance without having to pay an initial deposit. Read on to discover how this works and whether you could get no deposit car finance.

The types of car financing

Car financing is a very common method used when buying a car. For the majority of us out there, paying for a car outright is unrealistic, especially if you’re looking to get a new vehicle. Car financing gives you the option to pay off the cost of your car monthly, rather than paying the cost in one go. There are a few different types of car financing available that you can choose from, with the main two being hire purchase and personal contract purchase:

Hire purchase (HP)

Hire purchase is one of the most popular car financing methods. You can either set up an HP deal with your car dealer directly or with a third party broker or lender. Generally, you may get a better deal with an external company than the car dealership so it’s good practice to shop around.

With many car finance options, a deposit of around 10% of the purchase price is required to secure the financing – we’ll get to the zero deposit options later in the article.

HP contracts can last anywhere between two and five years, with monthly payments, plus interest, paying off the value of the car. Once your contract is up and you have completed all your payments, the car is yours. You may have to pay a final payment that is higher than your monthly cost to secure the vehicle, but this will be agreed when buying the car so there will be no hidden surprises.

So, once your contract has come to an end and all payments have been made, you are then the owner of the car and can do with it whatever you please.

Personal contract purchase (PCP)

A personal contract purchase (PCP) is similar to a hire purchase in many ways. The car is paid off in monthly installments rather than one lump sum. You have the option of paying a deposit, which does reduce your monthly payments and overall interest. Despite their similarities, there is one clear difference between HP and PCP car financing deals.

With a HP agreement, you are paying off the full value of the car each month and so at the end of the agreement, you own the vehicle. However, with a PCP agreement, you are only paying off the depreciation of the car each month, rather than the full value.

So, you are essentially paying the difference between the car’s value when you purchase it and the estimated value of the car at the end of the agreement. In essence, you are renting the car from the dealership for a set number of years. At the end of the contract, you can make a choice between paying a lump sum to keep the car, trading in the vehicle for a newer model or returning the car entirely to the dealer.

No deposit car finance

So, now we’ve covered the two most popular forms of car financing, it’s time to take a closer look at how you can secure a car finance deal without having to fork out the initial deposit. It sounds too good to be true, right? Driving away in your dream car without having to pay a penny upfront. But it is in fact a reality.

Due to the huge competition out there when it comes to car financing options, from car dealerships to independent companies, there are a number of deals now available to allow companies to stand out from the crowd.

Typically, the best no deposit car finance deals are found from third party companies. This includes car finance price comparison websites such as Confused.com, which compare the best deals from across the market.

Alternatively, car finance brokers such as My Car Credit will offer you a broader panel of lenders who cover all credit profiles, from excellent through to bad.

No deposit car finance is available from most of My Car Credit’s lender panel. This means if you find a car worth £7500, a lender from My Car Credit would pay for the vehicle from the dealership and offer you a repayment plan over your chosen term, leaving you with nothing to pay upfront.

Secure the best deal

If you’re looking for a new car and want to know your budget or perhaps you’ve found your dream vehicle and are wanting to get driving as soon as possible, the no deposit car financing deals from My Car Credit can get you on the road in no time. We have a number of options available to suit you, no matter your circumstances.

Get a car finance quote today using our quick and easy calculator. You can then apply online and get an instant, online decision on car finance. If you need any help, feel free to get in touch with our friendly team to see how we can help you drive away in your new car.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What Does ‘Finance’ Mean When Buying a Car?

Car Finance or Personal Loan – Which is Best for You?

Can I Give My Car Back to the Finance Company?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Car Finance vs Personal Loan, what’s best for me?

Car dealer handing over the keys to car bought on finance

If you’re looking to buy a nearly-new or used car and considering taking out a finance agreement, you’ll probably already know that there are a few options available to you. At My Car Credit, we want to make this choice easier with our no-nonsense lowdown on car finance options. Whichever option you choose, we are here to take care of it!

Personal Loan

In short: You borrow a lump sum from the lender to buy the car, which means you own the car from the start of your contract. You then repay this money (with interest) at a set monthly rate within an agreed time limit, usually between 24 and 60 months.

Pros:

Your interest rate is fixed and lower than other options where your credit score is good
Your monthly repayments are fixed, so you can budget around them
You own the car from the start of the contract
You can choose the time limit of the loan

Cons:

Your interest rates can be higher if you have a poor credit score
You are entirely responsible for the car and all repairs
You have to borrow over £1,000

Ideal for people:

Who want to own the car from the start of their contract
Who want flexibility with their repayment structure
Who are looking for lower interest rates

Eligibility

Most people will be eligible to take out a Personal Loan. However, those with a bad credit score or those with a bad credit history (especially those that have CCJ court orders against them) may be declined.

At My Car Credit, we work closely with a number of trusted Personal Loan funders. You can make an application on our website to determine your chances of being accepted and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

Hire Purchase

You put down a deposit on a car and the lender pays for the rest. You then ‘hire’ the car from the lender until you have paid off your monthly repayments, at which point the car becomes yours. Your monthly repayments are paid within an agreed time frame, usually between 12 and 60 months, and will differ dependent on how much deposit you put in.

Pros:

The repayment time limit is more flexible
Your interest rate is fixed, and will be lower depending on your deposit amount
You are more likely to be accepted if your credit score isn’t the best

Cons:

You don’t own the car
You have to pay a deposit
There can be additional fees (such as a transfer of ownership fee at the end of the contract)

Ideal for people:

Whose finances and circumstances are suited to fixed monthly repayments
Who don’t have the best credit rating
Who want to own the car at the end of their loan
Whose disposable income could change (e.g. starting a family, changing jobs)

Eligibility

Hire Purchase agreements are one of the more accessible car finance options. Although not everyone is accepted, there is normally a broader spectrum that this option will cater for, i.e. credit profiles that range from excellent to poor, and several employment statuses, including retired, young professional and self-employed.

At My Car Credit, we have access to a large panel of lenders that offer excellent Hire Purchase agreements. You can make an application on our website to determine your chances of being accepted and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

Personal Contract Purchase (PCP)

You borrow the difference between what the car costs when you take out the loan and what it will cost at the end of the loan. This is called a Guaranteed Future Value (GFV). In other words, if the car costs £3,500 at the start of your loan and will cost £1,500 at the end of your loan, you need to borrow £2,000. The GFV also includes your estimated mileage as a factor. Normally this kind of loan will last between 18 and 48 months. At the end of your loan, you have three options: buy the car by paying what it costs at the end of your loan, give the car back and settle the loan, or part exchange for a new car.

Pros:

Your options are more flexible at the end of your loan
Service and maintenance packages, as well as warranties and insurance, are normally included
You could drive a new car that you couldn’t afford with a cash payment

Cons:

It’s more expensive than other finance options to buy the car outright
Additional charges are made if the mileage agreement is exceeded
You don’t own the car during the loan

Ideal for people:

Who want to drive a new model
Who frequently want to change the car they drive
Who don’t want the responsibility of owning a car outright

Eligibility

PCP is slightly stricter in terms of its acceptance rate. Normally, a fair credit score is required.

At My Car Credit, you can make an application on our website to determine your chances of being accepted for a Personal Contract Purchase and because we only carry out a ‘soft search’, there will be no trace left on your credit file.

If you need any help or advice about which finance option is best for you, whether it’s a Hire Purchase agreement, Personal Contract Purchase agreement or a Personal Loan, our team of Car Credit Specialists can advise you. Just give us a call!

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

PCP vs HP vs Leasing: Which Car Finance Option Is Right for You?

Car on Finance Written Off: What Happens?

5 Benefits of Using a Car Finance Broker in the UK

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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HP, Conditional, PCP: The Lowdown on Car Finance Options

Customer calculates car finance monthly payments

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

Car finance allows you to become the owner of a car where you are unable to pay for your car upfront.
You make affordable monthly payments directly to the agreed lender of your car finance.
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

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

PCP vs HP vs Leasing: Which Car Finance Option Is Right for You?

Car on Finance Written Off: What Happens?

5 Benefits of Using a Car Finance Broker in the UK

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Understanding hire purchase (HP)

Why consider no deposit HP?

Top benefits of no deposit hire purchase

Things to consider

Securing a no deposit hire purchase agreement

1. Compare lenders

2. Credit check

3. Understand the full terms

Find no deposit hire purchase deals with My Car Credit

Rates from 9.9% APR. Representative APR 10.9%

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Is financing a second-hand car right for me?

Find out more about financing a second-hand car

Rates from 9.9% APR. Representative APR 10.9%

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Require more help?

Love the charm and character of older cars but unsure about whether they’re eligible for finance? In this hands-on guide we’ll answer “what is the oldest car a bank will finance”. Our goal – to help you get behind the wheel of a car with its own unique story to tell.

The golden numbers

Exceptions to the rule

Defining a ‘classic’ car

Understanding classic car finance

Factors influencing classic car finance

Age of the vehicle

Condition

Rarity

Appraisal and valuation

Types of classic car financing

Hire Purchase (HP)

Personal Contract Purchase (PCP)

Personal Loans

Navigating your classic car finance journey

Research and due diligence

Consider specialty lenders

Insurance requirements

The bottom line on financing old cars

Secure the keys to a classic with My Car Credit

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