We know that car finance can feel daunting or confusing for some people. So to take some of the stress out of buying your next car, whether new or used, we've got your back with a handy explainer of the different finance options available and what they really mean.
Personal Loan
Want to enjoy the feeling of owning your car outright from day one? A personal car loan lets you pay back the borrowed money, plus interest, as fixed monthly repayments over an agreed term that suits you.
The amount of interest varies and usually depends on the duration of the loan, as well as your personal circumstances and credit score. This option is great if you're in it for the long haul and don't intend to change cars very often.
You can also secure a personal loan before you've even found a car.
Find out more about AA LoansHire Purchase (HP)
Want to eventually own your vehicle outright but take a bit more time to get there? This type of secured car loan means you pay an initial deposit, then fixed monthly amounts over an agreed term.
The car's owned by the HP company and you're essentially hiring it until you make the final payment.
After that, the car belongs to you. And the great news is, there are no excess mileage charges.
Find out more about AA Car FinancePersonal Contract Purchase (PCP)
Like to change or upgrade your car regularly? PCP gives you more flexibility at the end of your finance agreement.
Like HP, you pay an initial deposit and then fixed monthly payments over an agreed term.
But then at the end of the agreement, you can either pay a little more to keep the car (known as a balloon payment), choose to part-exchange it, or just return it to the dealer.
Find a used car on PCP with AA CarsLeasing
Want to drive a brand new car without having to pay for complete ownership? Car leasing - or personal contract hire (PCH) - is essentially just a long-term rental or car hire.
You simply pay a fixed monthly fee over an agreed period - which varies depending on the car - as well as an annual mileage limit. You often pay a certain amount upfront as well.
At the end of your contract, you hand the leased car back, and then either take out another deal or just walk away. To keep your leased car running smoothly, you usually have the option to add a servicing and maintenance package too.
Lease a new car with the AA
