Compare Car Finance

  • PCP & Contract Hire
  • HP & Car Loans
  • Compare differences
  • Understand terms
  • Choose what best suits you
  • Flexible purchase options
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Which Car Finance Suits You?

Other than property, your car is likely to be the largest expense you ever have. Given that outright purchase simply isn’t affordable how can you fund it?

Many people don’t feel they need to own the car they drive. Because of this car finance can make a new or better car truly affordable.


There is now a variety of purchase plans that break down the cost into smaller monthly payments.

90% of People Buy a Car on Finance

In the UK nine out of ten of us now pay for our car using some form of car finance. The reasons for using it are obvious:

  • You are spreading the cost over the time you use the car rather than paying it upfront
  • Leasing options (PCP & PCH) offer even lower repayments because you aren’t paying to buy the car outright.
  • You can probably afford a new or newer car would otherwise be possible
  • You can opt for a better brand than you otherwise could
  • Monthly payments often include servicing
  • You don’t need a perfect credit history
Aged 17 to 21? Want a new car and free insurance? Find out about Marmalade’s cars for young drivers

Key Differences Between Car Finance Types

Basic Principle Long term car rental Long term car rental with
option to own at end by
making a final payment
Plan is designed to
achieve car ownership
at end
Obtain loan; buy
car separately
Car & Finance linked?
Pay Deposit? whole sum
Monthly Payment?
Payments cover? Depreciation & Interest Depreciation & Interest Car Price & interest Car Price & interest
Own car during contract?
Own car at end? If you pay final
“balloon” payment
Restrictions? Mileage/Damage/
No Mods/Can’t sell
No Mods/Can’t sell
Can’t sell car
during contract
more info more info more info more info

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Compare Monthly and Total Payments

It’s useful to compare the monthly repayment and the total amount you would pay over the life of alternative types of car finance contract. It’s possible to draw some general conclusions, although you should always get quotations.


Example: BMW 316 SE 4door – 10,000 miles p.a.; £3,000 deposit; 36 month contract


£464/month £505/month £729/month
3+35 rental profile OTR Price £26,860

Borrow £23,860

Cost of Credit £3,196

APR 5.7%*

Total Repaid £27,056

GFV (final payment) £8,869

OTR Price £26,860

Borrow £23,860

Cost of Credit £2,394

APR 6.5%*

Total Repaid £26,455

n/a Total Paid for final ownership £30,049 Total Paid for ownership £29,244
Total Paid £17,634 Total Paid over 36 months £21,180 Total Paid less mkt value £20,375

*based on excellent credit rating. Source: website, June 2017

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What this comparison tells us:

1. Want to own the car? Then HP could be cheaper than PCP.

2. Don’t want to own the car? Then contract hire (PCH) may be preferable to PCP.

3. Unsure about ownership? Then PCP may be the best bet as it keeps your options open.

But you should always get proper quotes for the options that may be of interest to you – how your credit rating is assessed could be different depending on the provider, and this will influence the best route. We have seen examples where contract hire is the most expensive of the 3 options. So it pays to shop around.



Car Finance Loans Guide

If you’re uncertain which type of credit might suit you or you have a money problem then one of guides may help you. We summarise each type of loan and their pros and cons, and address issues regarding debt and credit ratings.


  • No Upfront Fees
  • Smart Online Service
  • Stay Safe & Secure
  • Independent & Impartial
  • Trusted Partners


For over a decade Solution Loans has helped people all over the UK find solutions to their personal finance problems.



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Our reputation is great. In fact we have scored 4.6 out of 5 based on 197 ratings & 30 user reviews for our car finance service.


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Written/Reviewed by: Amanda Gillam

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