Car Finance
Hire Purchase
(HP)
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The most popular type of car finance and easy to understand.
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Borrow an amount of money secured against the vehicle, plus any interest, over a set period of time.
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The car is yours at the end of the term.
Conditional Sale
Conditional Sale (CS) means that you will have full use of the vehicle for the term of the agreement, and it will be registered in your name. You won’t fully own the car until all repayments are made.
Personal Contract Purchase
(PCP)
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Pay off the car’s depreciation value, instead of making payments towards the full price of the car.
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For example, if the car you buy costs £15,000 and it’s expected to be worth £10,000 when your term ends, then your payments will be based on the depreciation of £5,000.
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You can buy the car outright at the end with a balloon payment, Hand it back or exchange it for newer car.
Personal Loan
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The only finance type that isn’t secured against the vehicle itself.
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Loan an amount of money from a provider and use that to pay for the car. You will pay that money back through regular monthly installments plus any interest.
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You will own the car from day one.