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First published: 11th May 2015


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How to pay for your new car

Which is the best form of finance to use when you're buying a new car?

First published: 11th May 2015
It can seem as if there are almost as many ways to pay for a car as there are cars to choose from in the first place. No one way is right for everyone, and making the right choice can save you thousands in the long-run.

Whether you want to keep the car long-term or like to change cars every few years, our advice guides explain the choices and help steer you through the pros and cons of the various options.
If you have the money, then paying for a car upfront can be the simplest way. Low interest rates on savings could make this attractive.
You can take a loan from a bank or building society. You own the car from the start and, unlike dealer finance, it’s not linked to your choice of car.
You pay a deposit – typically something like 10% of the car’s price – and make monthly payments over a period of years, but you don’t own the car until the end
PCPs help keep monthly payments low by deferring a lump sum till the end of the plan – when you can choose what to do next
You rent a car from a dealer or hire company for a certain number of years. At the end of the period, you give the car back – but you’ll have to stick to mileage limits.
You can take advantage of special offers, but not every dealer will accept them; and even those that do may not let you put the full amount on a card
Related topics: New car finance