Most people who buy a new car use finance to pay for it. We’ve put together a short guide on getting finance through a dealer on carwow, the different types of finance on offer and the pros and cons of each type.
If you’ve already picked your perfect new car, why not use our PCP calculator to get a better idea how much it could cost?
All dealers on carwow can provide finance
All the dealers on carwow are official UK main dealers, just like your local dealer, so can provide manufacturer finance. To get a quote please call or message them, just remember to let them know the level of deposit you wish to put down, your annual mileage and the term you want the finance over.
All main dealers have the same finance rates
All main dealers of the same car manufacturer will have the same APRs and terms. This means whoever will provide the cheapest overall offer on the car will also be the cheapest on finance
Offers can change depending if finance is taken or not
On some models manufacturers give further discounts in the form of deposit contributions if you take their finance.
Listed below each offer you get on carwow will be information about the current finance campaigns that apply to that car. Make sure you read this part as you may find out the car is considerably cheaper than the outright purchase offer.
Manufacturer car finance
All car manufacturers provide ways to finance their new cars. The offers, terms and APRs for new cars do not vary between their dealers. So whichever dealer offers the lowest price on the car will also give the cheapest monthly cost.
With carwow the finance price is always shown with any manufacturer deposit contribution on offer. Further incentives offered by some manufacturers, such as loyalty schemes, are not included in the carwow price. Using these will then reduce the offer further.
Be aware of companies that claim to offer very low prices on new cars, they almost always require you to take out 3rd party finance, so end up more expensive per month. Also be aware of salespeople who claim to give you a discount, when really they are just using the manufacturers finance incentives, with carwow you can get a discount from the dealer AND use the manufacturer’s finance incentive.
If you own a business or are a sole trader then let the dealers on carwow know this, the rates are generally better than personal finance rates.
Types of car finance
Personal Contract Purchase (PCP)
On PCP finance you pay a monthly fee then have the option to buy the car at the end of the agreement for a pre-determined amount.
You pay an initial deposit, you can usually choose the amount, then pay a monthly fee. The monthly fee will depend on the APR (which on new cars is identical across all main dealers for the same brand) and the cost of the car (whoever is cheapest overall will be cheapest per month).
At the end of the agreement you have the option, but not obligation, to buy the car for a pre-agreed price, called the Guaranteed Minimum Future Value.
So at the end of the agreement you can:
a) Give the car back and walk away b) Buy the car for the GMFV and own it c) Trade in the car for a new one, using the GMFV as part of the payment
- Generally lower monthly payments than HP
- Deposits are usually flexible, you choose the amount to put in
- Flexible terms (usually 12-48 months)
- Choice of options at end
- Can be paid off early (Ts and Cs apply)
- If the car exceeds ‘Normal wear and tear’ you’ll have to pay a penalty
- If you exceed the mileage agreed you have to pay a cost per mile at a rate agreed beforehand
For more information, read our PCP car finance guide.
Hire Purchase (HP)
HP finance is a loan against the car, similar to taking out a mortgage on a house.
You pay an initial fixed deposit, then an agreed monthly fee which is dictated by the cost of the car and the APR. The length of the loan can vary, but once all payments are made you are then the owner of the car. Until you make all the payments the finance company still owns the car, but you are the registered keeper.
- Quick and easy to arrange
- Low deposits (usually from 10%)
- Flexible terms (usually 12-60 months)
- Competitive fixed interest rates
- Unlimited mileage
- You don’t own the car until the final payment
- Can be more expensive for short-term agreements
- Can be more expensive than a normal bank loan
For more information, read our Hire Purchase car finance guide.
Leasing (Personal Contract Hire)
When you lease a car you don’t ever own it, you pay per month to effectively hire it.
So, unlike PCP, there is no option to buy the car at the end.
- Fixed cost motoring
- No depreciation risk
- Additional protection available
- Often more expensive than PCP
- Maintenance payments push up costs
- You cannot keep the car
- Often a large deposit is needed (usually 3 months worth)
- Restrictions on mileage
- Penalties for excess wear and tear
For more information, read our car leasing guide.
You take a loan out from the bank/finance company. You buy the car you want, you then pay back the loan. You can do whatever you want with the car, you own it, you just have to keep paying off the loan.
- Can be arranged over phone
- Competitive fixed interest rates
- Can cover cost of whole vehicle
- Own the car from the beginning
- Have to wait for funds to appear
- Can affect other borrowing
- Need good credit rating
- Banks have varying loan rates, a lot of shopping around to find the best one.