What is CS Car Finance?

At My Car Credit, we’re dedicated to helping you find the right car finance agreement for your unique needs. That’s why we’ve got a complete guide to car finance to help you secure a suitable deal for your circumstances. 

Below, we’ll break down one specific kind of auto finance – conditional sale – into simple, digestible terms.

Similar to hire purchase (HP) car finance, conditional sale (CS) finance is an ideal agreement for motorists who want to own the car at the end of the term without facing extra conditions. Read on to find out the answer to: What is CS finance?

What is CS finance?

Conditional sale car finance – or CS car finance – is one type of auto finance agreement. 

With CS car finance, you’ll benefit from affordable monthly payments and will own the vehicle in full once all your agreement’s conditions are fulfilled.

CS car finance is very similar to hire purchase (HP) car finance. However, to own the car at the end of an HP agreement, you have to pay a small ‘option to purchase’ fee. With conditional sale finance, provided that you’ve made all the monthly payments, the car is automatically yours at the end of the term – you won’t face a final fee.

How does conditional sale work?

Here’s a step-by-step breakdown of how CS finance works:

1. Choose your car. Shopping for a new, nearly-new or used car is one of the more fun parts of life. Don’t forget you can use My Car Credit’s one-stop shop of FCA-vetted dealers to find a nearly-new vehicle.
2. Speak to a lender about a conditional sale finance agreement.
3. Make your fixed monthly payments. Depending on the type of contract you agree with the lender, these payments typically extend over a period of time ranging from one to five years. A longer term means lower monthly repayments, but more interest overall.
4. No balloon payment. With CS finance, you’re the guaranteed car owner after you’ve made your final finance payment.

With CS finance, a deposit is optional and often flexible, depending on the lender. However, opting to make a deposit can reduce the amount left to pay per month, and the overall interest you owe.

Remember that your monthly payments will cover the full cost of the vehicle plus interest.

Who is CS finance best suited for?

CS car finance is particularly suitable for drivers who:

• Want full ownership of the vehicle at the end of an agreement’s term.
• Don’t want final balloon payments or mileage restrictions whilst using the car.
• Value predictable budgeting – like My Car Credit’s other car finance agreements, CS finance breaks the cost of the vehicle into affordable monthly instalments, making budgeting easier.

CS car finance may also be a good fit for non-prime credit customers (subject to lender approval).

Pros and cons of CS finance

Is conditional sale right for you?

There are a few easy questions you can ask yourself to establish whether CS finance is right for you:

• Do you want to own your car at the end of the term? 
• Do you prefer simple budgeting?
• Do you want to avoid surprise charges?
• Are you comfortable with standard monthly payments?

If the answer to these questions is ‘yes’, then conditional sale car finance may be right for you.

You can always check the affordability of a conditional sale agreement by using My Car Credit’s car finance calculator.

What is the difference between hire purchase (HP) and conditional sale (CS)?

Conditional sale (CS) car finance is often described as similar to hire purchase (HP) car finance. 

There are some likenesses between these two car finance agreements, but they also differ in key ways. Being able to distinguish between the two will help you understand which type of agreement might be better for your motoring needs.

Ownership timing

With HP finance, you’ll usually need to pay an ‘option to purchase’ fee at the end of your agreement in order to fully own the car. 

Alternatively, you’re automatically the vehicle’s owner after you’ve made the final monthly payment of a CS agreement. In other words, unlike with HP, you won’t face an additional fee.

Agreement structure

With both HP and CS agreements, you’ll be paying for the full cost of the vehicle over time, plus any interest, via affordable monthly instalments.

Deposit & term

The deposit and term of both CS and HP car finance are very similar. You’ll benefit from an optional deposit and flexible repayment term with both.

End-of-term simplicity

If you prefer simplicity at the end of your car finance agreement, CS is likely best for you compared to HP. 

With CS, there’s no need to make a final decision or payment to secure vehicle ownership.

Who it’s best for

If you know that you want to own the car outright at the end of your car finance agreement and avoid any mileage restrictions and end-of-agreement admin, CS car finance might be right for you.

HP car finance is also suitable for drivers looking to own their vehicle but want to delay a guaranteed commitment to do so until the final payment.

Apply for conditional sale car finance with My Car Credit

Now that you know the answer to ‘what is CS finance’, you can decide if it’s the right choice for your car financing needs. At My Car Credit, our goal has always been to make securing online car finance as simple and accessible as possible. As part of the UK’s largest motor finance broker, we combine award-winning technology with a broad lender panel to improve your chances of being accepted for the right car finance agreement for your needs.

Our initial credit check is only a soft search. As such, it won’t leave a mark on your credit report, but will give us a sense of your circumstances and borrower profile.

Use our online application form to kickstart your conditional sale car finance journey with My Car Credit today. A simplified application process will give you a no-obligation quote in mere minutes, putting you in the driver’s seat as speedily as possible.

Frequently asked questions

Do I need a deposit for CS car finance?

Any deposit for CS car finance is optional, depending on lender flexibility. That said, if you do pay an initial deposit, this can reduce both your monthly repayments and any interest you owe on a CS car finance agreement.

Is CS better than HP?

If you’re looking for simplicity at the end of your finance agreement and know that you want to own the vehicle in full, CS car finance might be a more suitable agreement compared to HP.

What’s the difference between CS and leasing?

With a leasing agreement – also known as personal contract hire (PCH) car finance – you’re essentially renting the vehicle for a set period of time. At the end of the term, you’ll hand the car back. Alternatively, with CS car finance, you’re guaranteed to own the vehicle at the end of the agreement.

What happens if I want to end my CS early?

Cancelling a car finance agreement early is known as voluntary termination. It is possible to secure voluntary termination on CS car finance, but you’ll need to notify the lender in writing and have paid at least half of the total amount payable under the agreement.

Can I get CS finance with bad credit?

My Car Credit offers CS finance even to drivers with poor credit by looking at each case individually and without judgement. Be aware that poor credit history can result in higher monthly payments and interest rates.