It’s September, and the new car plate has been released! If you are thinking about getting yourself a new car, make sure you know the different types of finance available. We’ve created a quick guide covering some different types of finance options that may be available to you.

Hire Purchase is a type of car finance where you will generally pay a deposit (tends to be 10%), and are required to meet fixed monthly payments towards the value of the car.

Pro
  • Hire Purchase can help you get a car with a low initial deposit.
Con
  • The car is only 100% yours after you make the last payment on it.

A Personal Contract Purchase also involves making an initial deposit followed by monthly payments, but you are covering the amount of depreciation against the car instead.

Pro
  • Tend to have lower monthly payments than with Hire Purchase deals.

Cons

  • Exceeding the mileage can usually result in additional charges.

Personal Contract Hire deals are where you pay a dealer a fixed monthly amount to use a car, with the likes of servicing and maintenance all included.

Pro
  • You don’t have to worry about the car depreciating in value.
Con
  • The car is never yours as you give it back at the end of the term.

A Personal Loan allows you to borrow a certain amount of money to cover the cost of a car (doesn’t have to be for the whole cost of car) and repay it over a number of years.

Pro
  • It can covers the whole cost of the car, meaning you can own it straight away.
Con
  • You may need to wait for funds to be paid into your bank account.

If you think a Personal Loan might be right for you, we provide loans  between £500 to £25,000, with a range of additional benefits to suit your needs. To learn more, visit www.serveandprotectcu.co.uk/borrow.

  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

Your cookie preferences

We use cookies on our website to make your online experience better. Please see our cookie notice for further details or agree by clicking the 'Accept' button.

Your cookie settings

Below you can choose which kind of cookies you allow on this website. Click on the "Save cookie settings" button to apply your choice.

FunctionalOur website uses functional cookies. These cookies are necessary to let our website work.

AnalyticalOur website uses analytical cookies to make it possible to analyse our website and optimise for the purpose of usability.

Social mediaOur website places social media cookies to show you 3rd party content like YouTube and Facebook. These cookies may track your personal data.

AdvertisingOur website places advertising cookies to show you 3rd party advertisements based on your interests. These cookies may track your personal data.

OtherOur website places 3rd party cookies from other 3rd party services which aren't analytical, social media or advertising.