Guide

Car finance explained

If you’re trying to get your head around car finance, and you don’t know your balloon payments from your monthly instalments, and your PCPs from your PCHs, let us help you understand them.

Words by: First published: 11th December 2017
Car finance can allow you to spread the cost of your new car over a period of time. This makes a lot of sense for a lot of people, but there are a number of different types, and understanding the differences between them can be complicated. And, once the financial acronyms start flowing, it’s very easy to get lost. That’s where Auto Trader’s Car Finance Glossary can assist.

We’ve put together a list of these complicated terms that a salesperson might start throwing around when talking about ways to pay for your car, along with explanations for each, so that you’ll be clued-up and super-prepared when talking about your options.

First off, here’s a brief explanation of the different types of car finance…
Hire Purchase or HP