4 years ago

UK Car Finance Basics Explained - PCP VS LOAN vs LEASE vs HP
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When buying a new or used car you need to carefully consider how you want to finance the purchase and also consider is leasing a car may be a better idea for you. THis little 2021 buying a new car vlog should help you understand all the options.

PCP VS LOAN vs LEASE vs HP is a long-standing dilemma that people find themselves faced with every day.

PCP is a personal contract purchase, this means you pay a deposit, a number of monthly payments, then if you want to keep the car you pay a further balloon payment to take ownership of the car from the finance company. If you don't want to keep it you can simply hand it back at the end of the finance agreement.

HP is HIre Purchase, with this op[tion you simply pay a deposit and then make monthly payments, at the end of the agreement you own the car.

BANK LOAN has a number of advantages, 1) it's often the cheapest way to borrow the money for your purchase (just not always) 2) the finance is against you and not the car, this means you can change the car as you wish, you could even sell the car and spend your money on something else. The car is yours immediately, as is the debt. With the PCP and HP the finance company is the owner of the car until the agreement is settled giving you less flexibility.

PCH / Personal Contract Hire / LEASING is the only one where you are not guaranteed the option to buy the car at the end (although you often do get the option) - so why would you do this??? hopefully the video explained why owning a depreciating asset is not always a great idea and getting into a good leasing deal can be a very economical way of driving a new car. Should you lease vs buy a car? you decide.

PCP VS LOAN vs LEASE vs HP is an old question for which many have answers but not too many truly understand the dynamics, hopefully, this video will help you to become someone who understands car finance and helps you to make great choices when getting your next new or used car.

At the end of the video I look at a real world example of car finance on the brand new 2021 Peugeot 3008 GT - it's not a typical example at all which is why I suggest you always shop around for any kind of car finance and carefully consider all of the options before you buy or lease a car.

00:00 Intro
00:39 Basic Car Finance Options Explained
06:20 2021 Peugeot 3008 GT - Car Finance Examples
11:34 Outro

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