Loan

A personal loan from a bank or other lender.

This method can work out substantially cheaper than taking the dealership finance.

Example

Here's an example of a loan agreement on a £10,000 loan over 5 years at 5.5% APR:

You would make 60 payments at £190.39 per month. The total amount repayable would be £11,423.40, including interest and fees of £1,423.40.

Pros

  • No deposit required
  • Usually the best interest rate
  • You own the car

Cons

  • If you sell the car you need to clear the finance
  • More expensive payments than a PCP