• 2022-12-29 08:00:00
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What’s The Best Way to Buy a Car?

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Buying a car is a big decision and there are many ways you can finance your purchase. From cheap car finance deals to cash purchases, below we look into the best way to buy a car.

Buying a car on finance

One of the most popular ways to purchase a car is with car finance. Car finance is a loan that is connected to the car that you buy, and there are a few different types of car finance to choose from.

Hire Purchase Car Finance

Hire purchase car finance is one of the most common ways for people to finance their car purchase. It involves placing a deposit down on a car and then making monthly repayments to pay off the rest of the value.

There are some no deposit car finance options, which can be a great solution if you are able to make the monthly payments, but don’t have the initial upfront lump sum.

The repayments are usually made over one to five years – the longer the term, usually the higher the interest is. However, the monthly payments will be fixed, so you’ll know exactly what you’ll have to pay each month.

After the final payment is made, you will own the car and can continue to use it or sell it on. If you are unable to make the payments, the car will be returned to the lender.

Personal Contract Purchase (PCP) Car Finance

Another option for car finance is personal contract purchase, often known as PCP car finance. PCP is similar to hire purchase car finance in that an initial deposit will be made for the vehicle, followed by monthly payments, usually over a period of three to five years.

The difference is that you will not pay the full value of the car over the agreed period, so it can sometimes be a cheaper option. At the end of your contract period, you can return the car to the lender and end the agreement.

However, if you decide you want to keep the car, you can make a final “balloon” payment to pay off the rest of the value. Then you will own the car and be able to keep using it or sell it.

Personal Contract Hire (PCH) Car Finance

Personal contract hire, or PCH car finance, is another way of financing a car. This option is like a long-term rental and is ideal if you’re not looking to own the car outright at any point.

PCH car finance usually has much lower monthly repayments, and some agreements also include a level of maintenance, which can save you money on repair bills. The contract period usually spans around two to five years, after which the car will be returned to the lender.

Buying a car with a personal loan

Another way to buy a car is with a personal loan. This is where you contact a lender, such as a bank, to borrow an amount of money and then pay it back over a set period, usually a few years. You’ll also pay back interest on the loan.

A personal loan is different from car finance in that the loan is not tied to the vehicle you buy. So, when you purchase a car with a personal loan, you will own the car outright, even if you’re still making monthly payments. These monthly payments can be more expensive than other types of finance, depending on your terms.

It can sometimes be difficult to get approved for a personal loan if you have a poor credit score. This is when bad credit car finance can be a better option, as you may be able to get approved regardless of your credit score.  

Buying a car with cash

One of the simplest ways to buy a car is with cash. This may be from your savings, or it could be a gift from a loved one or a bonus earned from work. Buying a car with cash will not affect your credit score and you won’t have to factor in monthly repayments, as you’ll have paid the full value upfront.

This means you will own the car outright straight away, so you can sell it whenever you wish and made any modifications to it that you want. However, depending on how much cash you have, you could be limited in your choice of car.

Buying a car with part exchange

Another way to buy a car is with part exchange. This involves trading in your current vehicle to fund or part-fund your new car. Many garages and dealerships will offer this as a way to buy a car from them.  

You will have to agree the value of your current car with the dealership and then pay off the rest of the value, either with cash or a car financing option. It can be a good way of getting rid of your old car while making the purchase of your new car much cheaper. However, you should always make sure you’re happy with the amount that your current car is valued for, as you may find you can get a better price selling it elsewhere.


GetCarFinanceHere is a better way to finance your next car. Our team of experts will compare the market to find the best car finance deal for you. Apply online today to see how much you could borrow.

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