HP & PCP car finance


If you are looking for a car loan, the different options available may sometimes make it a confusing choice. To add to the confusion, you might lack the deposit that some lenders are going to ask as a down payment, or fail the credit checks that any lender is obliged to make before advancing a loan.

Here at CarFinance Plus, we can shed light on those choices, suggest which types of loan might be suitable for you and help to make sure that your credit rating meets the requirements of given lenders by carrying out a pre-authorisation, of “soft” credit check”.

Even if you have no deposit to put down as an initial payment or even if you have a less than perfect credit history (or you need bad credit car finance), we may be able to find the car loan for you.

The following are the main pros and cons of the different kinds of independently sourced car finance we are able to secure on your behalf:

Personal contract purchase (PCP)


  • effectively, a short-term lease of the car — usually extending for one to no more than 4 years, you have the chance to drive a new car every few years or so;
  • servicing and maintenance charges typically included;
  • monthly charges are calculated according to the price of the car at the outset and its — relatively high — residual value at the end of the contract plan, thus making the cost reasonably low;
  • you have the option of simply returning the car at the end of the lease or pay a final “balloon” payment to own it outright;
  • the Money Saving Expert offers a more detailed explanation of this type of car finance;


  • you do not own the vehicle;
  • ownership passes to you only if you make a relatively large payment at the end of the lease period;

Hire purchase


  • the principle of this long-established for of credit is well-known and likely to be immediately familiar;
  • there is a commitment to purchase the vehicle from the outset;
  • payments are spread over equal monthly payments — typically over a period of between one and five years;


  • you do not immediately own the car, but are responsible for keeping it serviced and maintained;
  • there is an initial deposit to pay — typically around 10% of the purchase price;
  • you may not sell or otherwise dispose of the vehicle without the hire purchase company’s consent;

Personal loan


  • such a loan allows you to buy a car outright — especially attractive, therefore, if your aim is vehicle ownership;
  • repayment terms may be spread over as many as four or five years;
  • interest rates on personal loans may be cheaper than some other forms of credit;


  • securing a personal loan — from a bank or other finance company — may require a more positive credit rating than other forms of borrowing.

This is just an outline of some of the options available to you if you are looking for a car loan — contact us if you want to discover more.

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