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PCP Finance Explained – Personal Contract Purchase Guide

At My Car Credit, we understand that when it comes to purchasing your dream set of wheels, budget can be a barrier. This is where Personal Contract Purchase (PCP) finance comes in. Flexible and affordable, the auto finance option is one of the most popular ways to purchase a car in the UK.

A new car on the driveway feels great. A huge upfront payment? Not so much. That’s where personal contract purchase (PCP) finance comes in.

PCP offers low monthly payments, lots of flexibility and the chance to drive a newer car more often. At the end of the term, keep it, swap it or hand it back. No pressure, just options. It’s no wonder PCP is one of the most popular auto financing options in the UK.

Looking for a clear guide on PCP finance explained? Continue reading to get a simple, easy-to-understand breakdown of how PCP finance works and what it means for you, from deposits and balloon payments to hidden costs and the best ways to save money.

What is PCP car finance?

Personal contract purchase works differently from other auto finance options like personal contract hire (PCH) and hire purchase (HP). Instead of paying off the full cost of a car, PCP covers only depreciation (this is the difference between the car’s price today and its predicted value at the end of the contract).

Lower monthly payments than options like HP
More choice at the end of the contract. Keep the car, swap it or hand it back
Access to newer, more expensive cars for less

No big upfront payments

Like other finance options, PCP helps spread the upfront cost of getting behind the wheel. Instead of saving for months or dipping into savings, drivers pay an initial deposit and start driving straight away. Some deals even offer zero-deposit PCP, making it easier to upgrade without a large lump sum. Since monthly payments only cover depreciation, rather than the full cost of the car, upfront costs stay low while still providing access to newer models.

PCP works best for those who change cars frequently or want an affordable way to drive something newer. If you want personal contract purchase explained in a way that highlights affordability, this structure makes it clear why PCP is such a popular option.

PCP finance explained: how does finance work on a car?

Instead of paying off the full value of a vehicle, drivers cover depreciation only. This means lower monthly payments compared to options like hire purchase. At the end of the term, instead of owning the car outright, there’s a decision to make:

Keep it
Trade it in for something new
Hand it back and walk away

The process starts with an initial deposit, followed by fixed monthly payments over an agreed period, usually between two and four years. When the contract ends, a balloon payment (also called the Guaranteed Future Value) determines whether the car stays or goes.

For those who like swapping into something fresh every few years, personal contract purchase keeps things simple – providing lots of options without long-term commitment.

A PCP deal breaks down into three key parts:

Deposit – the upfront payment

Unlike a traditional down payment that reduces the total loan amount, a PCP deposit helps cover the car’s depreciation.

A higher deposit lowers the monthly payments and makes finance more affordable over time. Some dealers offer zero-deposit PCP deals, but these usually mean higher monthly costs. The deposit also reassures lenders, showing commitment to the agreement and improving approval chances.

How much is a PCP deposit?

Usually 10% of the total value of the car. So, if you’re buying a new Ford Fiesta worth £20,000 you’ll pay a deposit of £2,000 upfront. If you’re looking at a BMW X5 worth £70,000 your deposit will be £7,000.

Can you get a PCP deal with no deposit?

Yes, some lenders offer zero-deposit PCP deals. But they’re usually reserved for applicants with excellent credit scores. Keep in mind that monthly payments increase without a deposit, because the entire finance amount is spread across the contract term. Skipping the deposit keeps upfront costs low but it also means higher long-term payments and potentially more interest paid overall.

Just want PCP car finance explained simply? A deposit reduces the amount borrowed, which lowers monthly costs and the total interest paid.

What happens to the deposit?

The deposit isn’t refunded at the end of the agreement. That said, if the car is worth more than the Guaranteed Minimum Future Value (GMFV) at the end of the contract, this difference can go towards the deposit on a new PCP deal.

Is it worth paying a bigger deposit?

While a larger deposit lowers monthly payments, it doesn’t always make financial sense. Paying too much upfront ties up cash that could be used elsewhere, and since PCP isn’t structured for outright ownership, a big deposit won’t necessarily bring major benefits. If keeping the car at the end is a priority, some drivers prefer to spread costs evenly and put money aside for the final balloon payment instead.

Can a part-exchange be used as a PCP deposit?

Yes, a trade-in vehicle can be used towards the deposit on a new PCP deal. If the car being traded in is worth more than the settlement figure, the difference can go towards the next agreement, lowering the amount borrowed. This can be a great way to upgrade without needing a lump sum upfront.

The amount you borrow

Unlike HP, where the loan covers the full cost of the car, Personal Contract Purchase only finances a portion of the vehicle’s value. The amount borrowed is based on how much the car is expected to depreciate over the course of the agreement, not the car’s total price.

How is the PCP loan amount calculated?

PCP finance is structured around three key figures:

The car’s price today
The Guaranteed Minimum Future Value (GMFV)
The deposit paid upfront

The difference between the purchase price and the GMFV (minus any deposit) is what gets financed.

For example, a £30,000 car with a GMFV of £15,000 after three years means the car is expected to lose £15,000 in value over the contract term. If a £3,000 deposit is paid upfront, the amount borrowed would be:

£30,000 – £15,000 – £3,000 = £12,000 financed

This £12,000 loan is then spread across monthly payments. Explaining PCP finance simply – borrowers only pay for the car’s depreciation, rather than its full value.

How depreciation affects monthly payments

Depreciation plays a major role in PCP affordability. Cars that hold their value well (think premium brands like BMW, Audi or Lexus) often have lower monthly payments because the gap between the initial price and the GMFV is smaller. On the flip side, payments can be higher for vehicles that lose value quickly, as the finance company takes on greater risk.

This means two cars priced at £30,000 but with different depreciation rates could result in very different PCP payments:

Car A (low depreciation)

GMFV of £18,000 after three years.

Borrowed amount: £30,000 – £18,000 = £12,000

Car B (high depreciation)

GMFV of £12,000 after three years.

Borrowed amount: £30,000 – £12,000 = £18,000

Despite the same purchase price, Car B costs £6,000 more to finance, meaning higher monthly payments.

How to reduce the amount borrowed

Drivers looking to cut monthly costs have a few options:

Choose a car with strong resale value – A higher GMFV means borrowing less.
Increase the deposit – A larger upfront payment reduces the amount financed.
Opt for a shorter term – Lowering the contract length can improve the GMFV.
Negotiate a lower interest rate – A lower APR means smaller finance charges.

The balloon payment

A balloon payment is the final lump sum due at the end of a PCP agreement. Unlike HP, where monthly payments gradually cover the full cost of the car, PCP leaves a significant balance unpaid until the final stage of the contract. This unpaid balance is called the Guaranteed Minimum Future Value (GMFV) and is an estimate of the car’s worth at the end of the agreement.

This model keeps monthly payments low but leaves drivers with a decision at the end of the term. Three options are available:

Return the car – Walk away with no further costs
Buy the car – Make the balloon payment
Part-exchange – Trade it in for a new deal

What if the car is worth more than the balloon payment? Good news. If the car holds more value than expected, the extra amount can go towards a new finance deal.

We’ll cover all three in more detail below!

How does PCP work at the end of the term?

PCP finance explained – it keeps things flexible right up to the final stretch. When the contract ends, there’s no pressure to stick with one path. Drivers choose what works best for them. Whether it’s handing the car back, keeping it or using it to fund a newer model, the options stay open.

Here’s how it plays out:

Return the car

Nothing more to pay with this option. Just hand the car back to the lender and walk away.

Best for: Drivers who like to upgrade their car regularly or want flexibility at the end of the contract.

No extra cost if: The car stays within mileage limits and remains in good condition.

Possible charges: Exceeding mileage limits or returning the car with excessive wear and tear could result in fees.

Buy the car

Want to keep the car? You’ll need to cover the balloon payment in full. This figure is set at the start of the agreement and reflects what the car should be worth at the end of the term. No surprises. Just a final bill standing between you and outright ownership.

Best for: Drivers who want long-term ownership or find the car’s value higher than the agreed GMFV.

No more finance payments: Once the balloon payment is settled, full ownership transfers to the driver.

Consider the cost: The final payment can be hefty. Some drivers choose to refinance the balloon payment with another finance deal to spread the cost.

Part-exchange

If the car ends up worth more than the GMFV, the difference can go towards the deposit for a new PCP deal. A handy way to roll into a newer model without a big upfront cost.

Best for: Drivers who like upgrading without saving for a large deposit.

Equity boost: If the car’s market value exceeds the GMFV, the extra amount reduces the deposit on a new PCP deal.

No guaranteed profit: If the car holds less value than the GMFV, no equity remains for a new deal.

Choosing the right PCP exit strategy

Flexibility sits at the heart of PCP. No long-term commitment, no pressure to stick with the same car. Just options that fit different needs. Whether it’s upgrading, keeping or trading in, drivers stay in control.

Best choice for frequent upgraders? Hand the car back and start a new PCP deal.
Best choice for keeping the car? Cover the balloon payment or refinance.
Best choice for rolling into a new deal? Trade the car in and apply the equity towards a fresh PCP agreement.

Benefits of PCP

There’s lots to love about PCP finance. Here’s a closer look at the benefits:

Lower monthly payments

PCP agreements focus on the car’s depreciation rather than its full cost. Instead of covering the entire value, payments go towards the difference between its original price and its expected worth at the end of the contract. With smaller monthly costs than options like hire purchase (HP), this keeps budgets in check while keeping options open.

More car for your budget

PCP stretches budgets further. A standard finance deal might cover a reliable runaround, but PCP offers access to something newer, sleeker or better equipped. A mid-range trim instead of the base model, a hybrid instead of petrol, leather seats instead of cloth. For drivers after the latest comfort or tech without breaking the bank, PCP makes it possible.

Flexible at the end

PCP offers more than one way out. Pay the balloon payment and keep the car. Trade it in and roll any equity into a fresh deal. Or hand it back and walk away. No pressure to commit upfront. No long-term ties. Just options that suit different circumstances.

Smaller upfront costs

PCP explained – it makes car finance more accessible, with lower deposits, or sometimes none at all. No need to drain savings or hold off for months to build a deposit. Just a manageable way to get behind the wheel.

Equity potential

If the car’s value sits higher than the GMFV, the difference rolls into the next deal as a deposit. A model with strong resale value means a better starting point for the next agreement. While never guaranteed, this can work in favour of drivers looking to upgrade without saving separately for a deposit.

Drawbacks of PCP

PCP has some great benefits but it’s important to understand the full picture before committing. Here’s a look at some of the potential drawbacks:

Mileage restrictions

Every PCP agreement includes a mileage limit. Drive beyond it, and fees apply per extra mile. The cost might seem small per mile, but over the years, it adds up. Best to estimate mileage honestly at the start rather than face a surprise bill later.

Condition requirements

Normal wear and tear are expected, but anything beyond that might mean extra charges. Scratches, dents, scuffed alloys or a coffee-stained interior could lead to fees. Keeping the car in good nick avoids unexpected costs at the end of the contract.

Final payment required to own the car

PCP doesn’t include ownership at the end unless the balloon payment is settled. Drivers wanting to keep the car need to cover this amount, often requiring extra savings or a refinancing deal.

Total cost may be higher

Interest applies not just to the borrowed amount but also to the balloon payment. This means, over time, the total amount paid could exceed what a similar car would have cost with an outright purchase or HP. Weighing up affordability against flexibility is key.

How to cut your monthly PCP car finance payments

PCP already stands out for its lower monthly payments. But with a bit of strategy, those payments can shrink even further. Here’s how to make PCP even more affordable.

Increase the deposit

A bigger deposit means borrowing less from the lender. Less borrowing leads to smaller monthly payments, keeping costs manageable over time. Most PCP agreements require at least 10% upfront, but putting down more trims down repayments even further. Worth considering if savings allow, but balancing affordability is key. No point in sinking all available funds into a deposit if it leaves nothing for running costs.

Choose a car with slow depreciation

Cars lose value over time, but some hold onto their worth better than others. Luxury brands, electric vehicles with strong demand and popular models tend to retain value, making them better suited to PCP deals. A higher resale value means a lower balloon payment at the end, keeping costs lower throughout the contract. Checking resale trends before picking a car can save a fair bit over the term of the deal.

Extend the contract length

PCP agreements usually run for two to four years, but stretching to five years spreads the cost further. Monthly payments drop, making it easier to budget. A longer contract does mean paying more interest overall, but for those prioritising lower monthly outgoings, it’s a sensible trade-off. Don’t forget, keeping within the expected mileage limit is important! Going over could mean extra charges, even with a longer term.

Look for low APR deals

Interest rates play a big role in the overall cost of PCP finance. A lower APR reduces the total amount paid over time, so it’s worth shopping around to find the best deals. Some dealerships and manufacturers offer promotional APR rates at certain times of the year, so timing a deal well can also mean decent savings.

What you need for PCP finance

Before getting started with a PCP deal, lenders check a few key details to make sure applicants meet the requirements. Nothing too complicated but having everything in order speeds up the process. Here’s what’s needed:

Personal details – Full name, date of birth and residential address history (usually covering at least three years). Lenders like stability, so a consistent address history helps.

Employment details and income – Current employer, job role and income details. Self-employed? Some lenders ask for tax returns or bank statements as proof of earnings.

Bank details – Account number and sort code for setting up the monthly payments. Some lenders also check banking history to assess financial stability.

Identification documents – A valid UK driving licence or passport confirms identity. You might also be asked for proof of address, like a recent utility bill or council tax statement.

Credit history check – Lenders run a credit check to see past borrowing behaviour. A strong credit score helps unlock better rates, but options exist for those with less-than-perfect records.

With these details ready, the PCP process moves along smoothly. A bit of prep upfront makes all the difference.

PCP vs. other auto finance options

Still not sure if PCP is your ideal route? Now we’ve got PCP finance explained, let’s compare it to other options to get a better understanding of the pros and cons:

Hire purchase (HP)

HP agreements let you spread the cost of the car over a set term, but instead of options at the end of the agreement you own the car outright. It’s like paying off a mortgage and owning your home when the final instalment is made.

Personal contract hire (PCH)

PCH agreements involve leasing a vehicle throughout the duration of a contract. Unlike PCP and HP loans, PCH doesn’t involve borrowing money for car ownership. Instead, you initiate the leasing agreement with a non-refundable deposit and then make monthly ‘hire’ payments that give you use of the car. At the end of the contract, you’ll return the vehicle without the option to purchase it and become the outright owner. It’s important to note that PCH agreements often come with restrictions, including mileage limits and caps on acceptable wear and tear.

Personal loan

With a personal loan, you borrow a lump sum to purchase the car and own it from day one. Interest rates are usually significantly higher for personal loans.

Why choose My Car Credit for PCP finance?

At My Car Credit, we’re your trusted co-pilot when it comes to securing the best PCP finance deals. Why choose us for PCP finance?

Expertise: Our team has the knowledge and experience to guide you through the entire PCP process, from start to finish. If you need PCP finance explained, we have your back.

Variety: We work with a wide range of lenders to offer you the best PCP deals. Worried about having car finance declined? As well as high street banks, we partner with smaller lenders who can help you get finance, even if your credit score is less-than-perfect.

Choice: As well as partnering with a wide range of lenders, we offer a huge amount of choice when it comes to cars. No need to limit yourself to particular makes and models. We pride ourselves on helping every client secure the keys to their dream car, whatever that might be. It’s like having access to a huge showroom of cars, all in one place.

Flexibility: We tailor our PCP agreements to suit your specific needs, offering you a good amount of flexibility when it comes to things like deposit size, contract length and vehicle options.

Support: Need your Personal Contract Purchase explained? We’re here to answer your questions, provide guidance and make your PCP journey as smooth as possible.

Ready to get behind the wheel? Give us a call on 01246 458 810 to find out more about PCP finance options or email us at enquiries@mycarcredit.co.uk for a speedy response.

Frequently asked questions about PCP

What does PCP stand for?

Personal Contract Purchase.

Is PCP car finance a good idea?

PCP works well for low monthly payments and flexible choices at the end.

What if I want to end my PCP car finance contract early?

Early termination is possible but may include settlement fees.

How does PCP work at the end of the term?

The car can be returned, traded in or bought outright.

What are the risks of PCP car finance?

PCP keeps things flexible, but it’s not without its pitfalls. Go over the mileage or hand the car back with a few too many scuffs, and expect extra charges. That balloon payment at the end? Not exactly pocket change. And if the car’s value takes a nosedive, there’s no leftover equity to put towards your next set of wheels.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

How Long Does It Take To Get Car Finance Approved in the UK?

So, you’ve found your dream car, a suitable car finance deal, and you want to hit the road instantly. But how long does it take to get car finance approved in the UK?

How long does it take to get car finance approved?

The initial submission for car finance can take mere minutes. However, you’ll then need to wait for any initial quote to be approved.

The turnaround time for this will vary between car finance lenders. As a general guide, assume that you will wait at least 24 hours to hear if you’ve been accepted. That could even extend to 48 hours and longer, depending on the factors we detail below.

What factors impact how long it takes to get car finance?

Credit scores

Car finance providers will perform a hard credit check to assess your car finance affordability. These take a little longer to perform than any initial soft credit check, and will impact your overall credit score too.

It’s absolutely possible to secure car finance with a poor credit rating, but your application may be swifter with a higher score. Plus, you’ll be eligible for better terms.

Use free online tools like Experian to get a free credit score check and establish whether your report has any issues before applying for car finance. This will help to speed the application process along.

ID checks

Any car finance provider will need to perform an identity check. You’ll typically be asked to submit copies of your driver’s licence, which therefore needs to be valid – you’ll be instantly rejected if it isn’t.

As well as your driving licence, you’ll most likely need to provide a complete address history. Lenders will ask for the past three years of your address, and may ask for current proof of address too. You’ll also need proof of income, or evidence of profit for self-employed businesses, for many providers.

Having all the relevant documentation to hand can significantly speed up the car finance approval process. Ensure that you have the relevant ID, and that it’s all up-to-date before applying for car finance.

Time of day

If you’re after same-day approval for car finance, apply as early in the day as possible! Some lenders will only turn around same-day approval if you apply by a certain time, so it’s worth checking this.

Secure timely car finance with My Car Credit

Email us on enquiries@mycarcredit.co.uk to get the ball rolling with your car finance journey.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

No Deposit Car Finance – How Does it Work?

What is Hire Purchase? – Simple HP Explanation

How Do Balloon Payments Work?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

approval car buying car finance credit score Jan24 time

How Should New Drivers Start Saving for a Car?

If you’re a new driver, you may find yourself asking ‘but can I afford to buy a car?’ After a house, a car is one of the most expensive purchases you’ll make in your lifetime. As such, it’s sensible to start saving for a car as soon as possible.

In this post, we’ll cut out the jargon and explain how to start saving for a car.

Why should you start saving for a car?

With all the car finance that’s available, you may find yourself wondering why it’s even worth saving for a car.

With car finance, you borrow a pre-determined amount of money against the purchase of a vehicle. You then pay this money back via a series of monthly instalments – plus interest.

As such, if you can start saving for a car deposit (sometimes called a down payment), you’ll be reducing the sum of your monthly car finance repayments. You’ll also be saving on the total car finance that you owe, because you won’t have as much interest to pay.

For example, if you borrow £7,000 for your car finance, you may face monthly repayments of £265. The overall amount that you might pay for your car finance could therefore reach £9,500. However, by putting down an initial deposit of £2,000, your monthly repayments would drop to £190. You’d be paying back £8,800, saving you £700 overall.

The higher your interest rate, the higher the amount you’ll save if you put down a deposit. Aiming to save between 10 and 20% of the overall amount is a good figure to go for.

How to start saving for a car

Your unique circumstances will determine what car finance is right for you. The size of deposit you can aim for will also be unique to you, and will vary according to the kind of car you’re saving up for.

Although it’s beneficial to have a higher deposit saved up, you should also be realistic. Break down your monthly budget, factoring in all expenditure, and establish a realistic figure for the amount that you can expect to save each month.

Also, remember that once you’ve secured car finance and a new vehicle, there will be other vehicle expenditures, such as maintenance and insurance fees.

Once you’ve established a realistic figure to save towards a car, you can decide where to store that money.

If you already have a savings account, you could set up a regular direct debit or standing order. This will automatically transfer a set amount each month, so that you don’t have to think about it. If you don’t have a savings account, take the time to compare different options.

If you already have a car, remember that you can trade it in or sell it. That can help to offset the cost of your next vehicle. Just remember to compare offers from different dealers or private buyers before settling on your final choice.

Find car finance today

Now that you’ve learned why and how to start saving for a car, you can start to think about your car finance. Contact My Car Credit on enquiries@mycarcredit.co.uk to learn more.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

What is a Balloon Payment on a Car Loan?

How Long Does It Take to Buy a Car?

Am I eligible for car finance?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Can You Get Zero Deposit Used Car Finance?

Securing used car finance with no deposit may sound like a pipe dream. In fact, there are lenders around who can help you to find finance for a used car whilst paying no deposit. That said, there are potential barriers to doing so.

Can you find used car finance deals with no deposit?

The short answer is – yes. Many lenders will work with you to find a no-deposit car finance deal on a used vehicle. There are many benefits to this option. You don’t have to pay a hefty lump sum upfront – typically just a modest reservation fee – and can crack on with full use of the vehicle.

However, typically only candidates with high credit scores will secure zero deposit used car finance. Individuals searching for car finance with a poor credit rating are unlikely to be offered a no deposit car finance deal, whether for a used vehicle or not.

Remember, too, that there are benefits to paying an initial deposit. Car finance deals like Hire Purchase (HP) or Personal Contract Purchase (PCP) require a deposit, which in turn reduces the size of your overall monthly repayments, as well as any interest rate attached.

By not paying an initial deposit, you have more money to pay back overall, which might also translate to a longer repayment period too.

As such, although no deposit used car finance might sound appealing, candidates with less than excellent credit ratings, or those who want more affordable repayment schemes, might want to reconsider whether it’s the most suitable option.

Find the right car finance for you

Find out if zero deposit used car finance is right for you with help from the My Car Credit team. Email us on enquiries@mycarcredit.co.uk and get behind the wheel of your ideal car finance today.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

Can You Modify a Car on HP Finance?

How Much Does Car Finance Cost? Check Now!

Can You Get Cars on HP with No Deposit?

Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

car buying car finance credit score Jan24 zero deposit

What Is the Best Car Finance for Me?

Man confused at different car finance option

Finding the best car finance for you comes down to a range of factors.

Distinguishing between different car finance agreements can feel mystifying, which is why we’ve provided this handy guide to help you secure the best car finance for your needs and circumstances.

What are the different car finance options available?

Not everyone has the available cash to pay for a car upfront, which is where car finance comes in.

Car finance is essentially a flexible, accessible way of financing a car. It allows you to borrow a pre-agreed amount of money to purchase a vehicle. This money is paid back in a series of affordable monthly instalments, during which time you have full use of the vehicle.

If you have car finance eligibility, you can apply for a few different car finance options. These include hire purchase (HP), personal contract purchase (PCP), personal contract hire and car loans.

Hire purchase (HP)

With hire purchase car finance, you’ll pay an initial deposit followed by a series of equal monthly repayments. The size of these will depend on your unique car finance deal, as well as the size of your deposit.

At the end of a hire purchase (HP) finance deal, you will own the car outright – no final payment is required. As such, your repayments on hire purchase are likely to be slightly higher than with personal contract purchase (PCP) finance.

Hire purchase (HP) car finance is available for both new and used vehicles.

Personal contract purchase (PCP)

PCP car finance is much like HP. You pay a series of monthly instalments to the lender, the size of which is determined by your initial deposit and contract length.

However, unlike HP finance, you don’t automatically own the vehicle when a PCP deal terminates. This means that your repayments with PCP will be lower than an equivalent HP deal, because you’re technically only paying for the car’s depreciation value.

If you choose to own the vehicle at the end of the car finance deal, you’ll pay one final lump sum (a final balloon payment). This can be equivalent to a third or half of the car’s initial price, so you can refinance the vehicle to pay for this.

Alternatively, if you have positive equity – meaning the car is worth more at your car finance contract’s end than the optional final payment – you can hand the car back, choose another, and put the extra value towards this vehicle’s deposit.

Because you won’t necessarily buy the car outright, PCP car finance often comes with a pre-agreed mileage limit. This protects the minimum future value of the car, as excess mileage can lead to depreciation.

Personal contract hire

This is also known as car leasing, where you pay to use a car for a set period of time. It’s essentially a long-term rental for a fixed period. Similar to PCP car finance, you will be paying to cover the depreciation in a car’s value. However, when your contract ends, there is no option to buy the car. You will always return it to the finance company.

Because it’s car leasing rather than car purchase, you can expect low monthly payments compared to other car finance deals like a hire purchase (HP) agreement.

Personal loan

Another one of your finance options is to get a personal loan to cover the cost of your new car (or used car). Rather than using a finance company, you would apply to a bank or credit union. The advantage of this option is that you can get personal loans to cover more than just your brand new car. That could include paying for your car insurance or just a bit of extra cash for home improvements. However, you’ll typically need a good credit rating.

Which is best for me?

The best car finance for you will depend on a number of factors…

For low monthly payments

Monthly payments are higher with HP because you automatically own the car outright at the end of the finance agreement.

If keeping your monthly repayments low is a priority, PCP is the best car finance for you. However, you may end up paying more overall than with HP finance, depending on the interest rate and length of your finance agreement.

However, if you want to own a car at the end of your agreement, car leasing (personal contract hire) is another option to consider. Your monthly payments will be low because you’re not working towards car ownership, and there’s no final balloon payment or remaining balance to pay off.

For minimal restrictions

PCP finance and lease deals often come with restrictions. These can include everything from mileage restrictions through to paying extra fees if you return the car with excessive wear and tear. Equally, if you want to take your car abroad, you may face limitations with certain lease deals and PCP agreements.

HP finance does not have these kinds of restrictions or limits, so it’s a better option if you think you’ll rack up a high mileage over your finance agreement – or if you often want to drive internationally. You’ll also own the car outright once you’ve reached the end of your finance agreement.

For car ownership

If you’re absolutely sure you want to own your chosen car at the end of the agreement, hire purchase is typically the best option. The full cost of the car will be broken down into your monthly payments so it’s fixed and manageable.

The car will be fully paid for with no balloon payment or settlement figure. However, a personal loan may also provide a simple route to car ownership, depending on your credit history and the annual percentage rate (APR) that you’re offered.

For flexibility

PCP finance agreements might have vehicle usage restrictions. However, PCP deals tend to be more flexible than HP finance.

Both kinds of finance have flexible repayment terms (typically somewhere from 12 to 60 months). However, with PCP, you have more opportunity to determine the length of your agreement. You can also change the size of your deposit.

Remember, the higher the deposit, and longer the contract, the lower these monthly repayments will be. That said, you may end up with higher interest rates compared to HP finance.

Summary

Here’s a brief overview of the types of car finance and what they offer:

Hire purchase – Fixed monthly payments to pay off the total value and own your car at the end of the agreement.
Personal contract purchase – Monthly payments cover the cost of a car’s depreciation with a large balloon payment, so you can choose whether you want to own the car at the end of the agreement.
Personal contract hire – A long-term rental with low monthly payments but no option to own your new car.
Personal loan – A loan from a bank or credit union to cover the total value of the car, but depends heavily on your financial situation.

Find the best car finance for you with My Car Credit

Navigating the different types of car finance and other finance options can feel overwhelming. My Car Credit is here to make things easier for you. As a car finance broker, we can compare the different finance options on your behalf from a network of trusted lenders.

Whatever your financial situation or credit score, we aim to find a car finance deal that suits your budget and preferences. If you are looking to secure the best car finance for you, try our Car Finance Calculator to begin your car ownership journey.

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Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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How much do you have to earn to get car finance?

Car finance can help to make the purchase of a vehicle more affordable. That said, you may still find yourself wondering, “but how much do you have to earn to get car finance?”

“How much does car finance cost? Am I earning enough to cover the expenses?” If these questions are on your mind, My Car Credit is here to help! In this article, we’ll clarify the factors that may impact the car finance terms you’ll face. Read on to learn more…

So, how much do you have to earn to get car finance?

There’s no one straight answer when it comes to how much income you need to secure car finance. It depends on a number of factors. However, it’s essential to ensure you have a sense of what you can afford to borrow before signing any car finance deal.

The factors that can impact the car finance you may be eligible for include your credit score, borrowing history, the loan type, the amount required, as well as the vehicle itself.

Any car finance provider will ask for proof of income when you apply – but you don’t necessarily have to be in full-time employment to be eligible. It really depends on a mix of the above factors. My Car Credit can also work with individuals with poor credit ratings, too. Again, it’s all about a combination of factors and personal circumstances.

Don’t forget that you need to factor other costs into the overall expense of a vehicle. Cars need regular servicing and maintenance, and you also have to pay everything from car tax to fuel and insurance.

Find out more about car finance

If you have questions about car finance, give our friendly team a call on 01246 458 810 or email us today at enquiries@mycarcredit.co.uk. We’ll guide your car finance journey, putting you in the driving seat.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Why New Car Registrations Are Growing in the UK

Man looking at buying a new car in a dealership

Recent data from the Society of Motor Manufacturers and Traders (SMMT) has reported the fourth consecutive month of increased new car registrations in the UK, with a rise of 23.5%. This marks the strongest growth rate for the month of November since 2019.

What’s driving this rise in new car registrations, and what might it mean for both the UK new car sales market and car buyers more broadly?

What are the figures for UK new car registrations?

Despite the global motor industry’s struggle with supply chain issues, the UK’s auto market shows growth in new car registrations. This demonstrates its general resilience as well as a tentative increase in consumer demand.

Electric vehicles (EVs) continue to drive the rise in UK new car registrations, with registrations of battery EVs rising by 35.2%. This number accounts for more than one in five new cars in the month of November. It’s also the largest monthly share of the new car market held to date by EVs, at 20.5%.

Registration of plug-in hybrids (PHEVs) accounts for more than one in four new registrations, but nonetheless fell over the same period by 5.7%. Meanwhile, hybrids rose by 66.9% to comprise 11.2% total of the market. This reflects a move by fleet operators looking for emissions reductions and greater fleet flexibility.

Petrol registrations also expanded by 15% to make up 40% of the market, a notable fact given the UK’s commitment to net zero. Registrations by large fleets also grew by 45.4% year on year, with business registrations virtually doubling (though still constituting a small market share). Demand from private buyers also demonstrated a small expansion of 2.7%.

What might this mean for the UK new car sales market?

This growth in new car registrations indicates a tentative recovery for the UK market, but car sales still remain around 9% below equivalent pre-pandemic levels, even with this growth.

The growth in market share by EVs does indicate a rising preference for non-fossil fuel vehicles. However, the market share of new car registrations held by petrol cars remains almost double that of EVs. As such, Mike Hawes – CEO of SMMT – has urged the government to further invest in EV incentive schemes and build more electric charging infrastructure ahead of consumer need. This aims to incite more consumers to adopt greener vehicles and ensure that the country will meet its net zero targets.

Further recovery of the UK’s auto industry is anticipated in 2023, with current projections suggesting a 15.4% rise in market growth. However, with the cost-of-living crisis and concurrent rise in energy prices, there are still reasons to be wary of premature conclusions regarding the market’s stability. As consumers face higher costs for charging electric vehicles, there is a risk that this may cause the market to stagnate with a drop in demand for EVs. Given that EVs are driving the current rise in new car registrations, this drop would impact the market’s overall growth.

How might this affect car buyers?

It’s difficult to make any clear conclusions as to how this growth in new car registrations might impact car buyers. Certainly, the demand for EVs and hybrid cars is only likely to increase, backed by government commitments towards net zero.

The UK government has promised an investment of £12 billion towards a net zero target by 2030, and reaffirmed their commitment towards transitioning to 100% zero emission cars and vans in the wake of COP26. The roadmap for achieving this transition includes steps such as ending the sale of new petrol and diesel engine cars, with a complete ban in 2030, and ensuring that all new cars and vans are zero emission by 2035. There’s also greater investment (specifically a commitment of £5 billion) to infrastructure, manufacturing and R&D for EVs.

However, EVs remain more expensive at initial purchase, which – in combination with the aforementioned rise to cost-of-living – may make consumers more resistant to purchasing brand new electric motors.

How to finance a new electric vehicle

For drivers looking for a way to reduce their carbon footprint and upgrade their car at the same time, opting for an EV or hybrid is an ideal choice. However, it can be a costly move, which is where car finance comes in.

If you’re looking for an affordable, accessible way to purchase an EV, you can use our car loan calculator to see the kinds of finance agreement you may be eligible for. Alternatively, email one of our team at enquiries@mycarcredit.co.uk.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Can I Finance an Automatic Car?

There are a number of benefits to automatic cars. From fuel efficiency and ease of use through to being more comfortable to drive during stop-start journeys in urban centres, there’s a reason why people opt for automatic vehicles. But can you secure car finance on an automatic car?

Can you finance an automatic car?

Yes, you absolutely can finance automatic cars. Your finance broker will be able to work with you to find a car finance deal that suits your circumstances, as well as covering the kind of car that you’re looking for, whether that’s a manual or automatic model. In fact, My Car Credit can even help you find car finance with poor credit, working with all kinds of drivers from a range of different backgrounds and with differing requirements.

This is obviously great news if you passed your test in a car with an automatic gearbox, as you’ll only be licensed to drive vehicles with automatic transmissions. However, many drivers simply prefer automatic cars even if they can drive manually.

Automatics can be more fuel efficient depending on your driving style. As well as better fuel economy, they eliminate the need to change gear, providing a smooth driving experience even in high traffic with no need to keep your foot over the clutch pedal. Not to mention making hill starts a breeze.

However, it’s worth noting that automatic cars may be more expensive to finance than manual options.

Why can automatic cars be more expensive to finance?

You’ll likely find that purchasing a manual, as well as insuring it, will tend to be cheaper than purchasing or insuring an automatic.

This is because automatic gearboxes such as continuously variable transmission (CVT) are more complex than manual ones. It requires more sophisticated technology, as the gearbox essentially chooses what gear you’re driving in. You’re just choosing between drive, park and reverse.

As such, automatic gearboxes tend to require more kit – meaning that they’re more expensive to produce, and more expensive to fix too. It also means that automatic vehicles have higher insurance premiums and are more expensive to buy in the first instance.

You’ll likely find that your finance agreement is therefore more expensive too, in order to reflect these costs. This may change over time as automatics become the norm. That’s because electric vehicles don’t need to change gear at all, so there’s no need for a gearbox.

As petrol, diesel and full hybrid cars are phased out, new and used automatic cars will become the norm, which could increase supply in line with demand to reduce costs.

Finance – automatic car options

Despite the higher cost, it’s well worth investigating your finance options if you’re set on cars with automatic gearboxes.

There are three main vehicle finance options, other than paying upfront with cash or via a personal loan. These are personal contract purchase (PCP), hire purchase (HP), and personal contract hire (PCH). All of these different kinds of car financing have advantages, depending on your needs as a driver.

Hire purchase

Hire purchase (HP) is arguably the simplest type of car finance for new and used automatic cars – as well as manual vehicles. The cost of your next car is broken down into monthly payments, plus interest. You then make these payments over the course of the repayment term, which can typically range from 3 to 5 years, until the cost has been paid for in full.

It’s very similar to a conditional sale, except that hire purchase has a small fee when you finish your agreement and purchase the car (rather than upgrading to a different vehicle, for example).

Personal contract purchase

Personal contract purchase (PCP) is another popular option for automatic cars. It’s similar to HP, but with a larger final payment. This is known as a balloon payment, which can be made if you want to buy the car outright.

Alternatively, you can opt out of the final payment and give the car back. In many cases, the money you pay will cover the car’s depreciation over the repayment term, with the balloon payment covering all of the interest (depending on representative APR) or a large portion of it.

Personal contract hire

Also known as leasing, PCH means you pay to use a vehicle for the length of your term. It takes the commitment out of your car search, as you know you’ll be able to switch to a new ride at the end of your deal – whether that’s automatic or manual.

Which is best for you?

Owning outright

One of the main factors when financing your next set of wheels is whether you want to own outright. If you definitely don’t, PCH is the best option, allowing you to continuously switch to your next car and drive newer models. If you definitely do, HP is for you. Alternatively, PCP offers more flexibility with the decision made at the end of your term.

Mileage

Mileage limits are another consideration. These are most common for PCP and PCH agreements to avoid excessive depreciation of the car’s value if you’re handing it back. You’ll need to pay if you exceed mileage limits, with charges per mile agreed as part of your deal.

If you don’t want to worry about mileage, HP may be the most suitable option. However, you’ll still need to check your agreement to make sure you don’t need to pay anything extra.

Availability

However, you may find that your finance provider will only finance an automatic car via one kind of finance deal. Whether or not that deal works for you will depend on your unique circumstances. That’s why it’s worth using a finance broker like My Car Credit, as you’ll be able to get the most competitive deal from our panel of lenders, rather than being restricted to just one.

Secure automatic car finance with My Car Credit

Compared to a manual car, one with an automatic gearbox can provide better fuel economy and an easier drive. With many new cars being automatic, there’s a better range than ever to choose from.

If you’re looking for finance on an automatic vehicle, find out how My Car Credit can help. Whether you want to discuss your finance options or your eligibility for finance, we’re on hand to support you through every step.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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Which Electric Car Should I Buy?

man using his phone to research which electric car to buy

With high inflation outstripping wage and benefit increases, the UK is going through a serious cost of living crisis. As a result, people are looking to cut costs in every area of their lives – and driving is no exception.

Economical cars can help you do that, saving you on fuel or even road tax over time. While it might seem like a small amount, every penny and pound will count as we all feel the squeeze over the coming months and years.

Keep reading as we look at 8 of the most economical cars that can make driving more affordable.

Most economical electric cars

First and foremost, electric vehicles account for many of the most economical cars on the market. That’s because they’re exempt from road tax thanks to zero emissions, cheaper to run because of fewer moving parts, and cheaper to power with electricity costing less than diesel or petrol.

On the flipside, they’re obviously more expensive to buy. That’s where a car loan finance calculator can help, showing you how the cost can be spread. To make things even more economical, here are some of the cheapest models available…

Fiat 500 Action

Priced at around £21,000 brand new, the Fiat 500 Action is one of the cheapest electric cars available. That’s partly down to its smaller 24kWh battery (compared to 42 kWh on previous models). As a result, the range is a modest 118 miles, making it ideal for urban commutes, short trips and general day-to-day use as long as you have a home charger.

Vauxhall Corsa-e

If you’re looking for something that can go a little further, the Vauxhall Corsa-e is a good option. The supermini’s official range is 222 miles, with prices starting around £25,000 brand new. It’s nice and lightweight so the charge won’t be used up unnecessarily. Naturally, with both of these cars, there’s a lot of money to be saved going for a used, older model.

Most economical hybrid cars

If you’re not ready to be plugging in just yet, or maybe you live in a remote area where chargers aren’t readily available, hybrids offer a good alternative. They use regenerative braking to generate electricity while driving, meaning you can supplement fuel from the pump without any extra work.

Toyota Yaris (and Yaris Cross)

Toyota is leading the way when it comes to hybrid efficiency. Both its Yaris 1.5 Hybrid and Yaris Cross 1.5 Hybrid offer around 60mpg on average.

The standard Yaris is smaller and cheaper to buy, making it the most economical hybrid car that’s ideal for individuals, couples or small families. As a small SUV, the Yaris Cross provides all that, plus a little extra space and the sought-after SUV styling – albeit at a little extra cost.

Elsewhere, the Toyota Prius is another top contender. While it doesn’t quite match the Yaris for fuel-efficiency, it’s been around for much longer, meaning there are a greater choice of older, used vehicles at a cheaper price.

Most economical diesel cars

While cars that are powered solely by fuel burning can’t quite match the efficiency of electric and hybrid models, they’re still some of the most economical cars, thanks to their lower price tags. Of the two fuels, diesel is known for its better fuel economy – making the next two cars a pretty good option overall…

Peugeot 208

With a 1.5-litre BlueHDi diesel engine, the Peugeot 208 achieves around 70mpg. Despite being a relatively small car, its five-door design makes it easy enough for rear passengers to get in and out. Its 311 litres of boot space makes it similar to other small cars, with the option to fold down rear seats for a 1,100 litre total.

Vauxhall Corsa

A second mention for the much-loved Vauxhall Corsa – this time for its 1.5 Turbo D model rather than its electric counterpart. It’s almost a carbon copy of the Peugeot 208 with the tiniest difference in mpg and boot space. That said, it does have a more responsive drive, meaning you can go economical without feeling it on every corner.

Most economical petrol cars

Out of all the fuel options, petrol is typically the least efficient – but that doesn’t necessarily mean it’s not economical. There are plenty of petrol cars to choose from with small engines, which makes them cheaper to buy and run. By choosing a smaller petrol car, you can still get from A to B at a relatively low cost.

Peugeot 108

First on sale in 2014, the Peugeot 108 is the quintessential economical car. It has an official mpg of just under 59mpg, thanks to a modest 1-litre engine and small, lightweight design. That does pose some issues for practicality, with the car and its 180-litre boot more suited to people travelling alone or as a pair. However, if you’re looking to cut costs, it’s hard to go better than this reliable city car.

Citroen C1

Like our top diesel contenders, we have another case of two similar cars matching each other stride for stride. The Citroen C1 is another economical car powered by petrol, with the same mpg as Peugeot’s city car – though it does come with a slightly bigger boot.

Keep your car economical

With the cost of fuel at an all-time high, not to mention everything else rising in price, it’s never been more important to have a car that’s economical to run. Invariably, that means you’re better off with newer models that are more fuel-efficient.

With My Car Credit, you can make your purchase as economical as your up-to-date car. We compare finance from our established network of lenders, saving you time while ensuring you get an affordable deal that spreads the cost of your next car.

If you have any questions about our process, don’t hesitate to contact our team on enquiries@mycarcredit.co.uk and we’ll get back to you as soon as we can.

Rates from 9.9% APR. Representative APR 10.9%

Evolution Funding Ltd T/A My Car Credit

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Loan amount

£

Repayment term

My credit rating

X monthly repayments of
^£X

Typical rate

Loan amount

Total payable

X% APR*

£X

*for illustration purposes only

No impact on your credit score*

Representative Example

Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

Evolution Funding Limited, trading as My Car Credit, is a credit broker and not a lender.

Please ensure you can afford the repayments for the duration of the loan before entering into a credit agreement.

*Initial application is a soft search. Should you progress, some lenders may perform a hard search on your credit file.

Require more help?

Got a question you can’t find the answer to, or need some advice and guidance around taking out car finance? Our Car Credit Specialists are friendly, experienced, and here to help so get in touch today!

or call 01246 458 810

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8 of the Most Economical Cars to Help You Save Money

With high inflation outstripping wage and benefit increases, the UK is going through a serious cost of living crisis. As a result, people are looking to cut costs in every area of their lives – and driving is no exception.

Economical cars can help you do that, saving you on fuel or even road tax over time. While it might seem like a small amount, every penny and pound will count as we all feel the squeeze over the coming months and years.

Keep reading as we look at 8 of the most economical cars that can make driving more affordable.

Most economical electric cars

First and foremost, electric vehicles account for many of the most economical cars on the market. That’s because they’re exempt from road tax thanks to zero emissions, cheaper to run because of fewer moving parts, and cheaper to power with electricity costing less than diesel or petrol.

On the flipside, they’re obviously more expensive to buy. That’s where a car loan finance calculator can help, showing you how the cost can be spread. To make things even more economical, here are some of the cheapest models available…

Fiat 500 Action

Priced at around £21,000 brand new, the Fiat 500 Action is one of the cheapest electric cars available. That’s partly down to its smaller 24kWh battery (compared to 42 kWh on previous models). As a result, the range is a modest 118 miles, making it ideal for urban commutes, short trips and general day-to-day use as long as you have a home charger.

Vauxhall Corsa-e

If you’re looking for something that can go a little further, the Vauxhall Corsa-e is a good option. The supermini’s official range is 222 miles, with prices starting around £25,000 brand new. It’s nice and lightweight so the charge won’t be used up unnecessarily. Naturally, with both of these cars, there’s a lot of money to be saved going for a used, older model.

Most economical hybrid cars

If you’re not ready to be plugging in just yet, or maybe you live in a remote area where chargers aren’t readily available, hybrids offer a good alternative. They use regenerative braking to generate electricity while driving, meaning you can supplement fuel from the pump without any extra work.

Toyota Yaris (and Yaris Cross)

Toyota is leading the way when it comes to hybrid efficiency. Both its Yaris 1.5 Hybrid and Yaris Cross 1.5 Hybrid offer around 60mpg on average.

The standard Yaris is smaller and cheaper to buy, making it the most economical hybrid car that’s ideal for individuals, couples or small families. As a small SUV, the Yaris Cross provides all that, plus a little extra space and the sought-after SUV styling – albeit at a little extra cost.

Elsewhere, the Toyota Prius is another top contender. While it doesn’t quite match the Yaris for fuel-efficiency, it’s been around for much longer, meaning there are a greater choice of older, used vehicles at a cheaper price.

Most economical diesel cars

While cars that are powered solely by fuel burning can’t quite match the efficiency of electric and hybrid models, they’re still some of the most economical cars, thanks to their lower price tags. Of the two fuels, diesel is known for its better fuel economy – making the next two cars a pretty good option overall…

Peugeot 208

With a 1.5-litre BlueHDi diesel engine, the Peugeot 208 achieves around 70mpg. Despite being a relatively small car, its five-door design makes it easy enough for rear passengers to get in and out. Its 311 litres of boot space makes it similar to other small cars, with the option to fold down rear seats for a 1,100 litre total.

Vauxhall Corsa

A second mention for the much-loved Vauxhall Corsa – this time for its 1.5 Turbo D model rather than its electric counterpart. It’s almost a carbon copy of the Peugeot 208 with the tiniest difference in mpg and boot space. That said, it does have a more responsive drive, meaning you can go economical without feeling it on every corner.

Most economical petrol cars

Out of all the fuel options, petrol is typically the least efficient – but that doesn’t necessarily mean it’s not economical. There are plenty of petrol cars to choose from with small engines, which makes them cheaper to buy and run. By choosing a smaller petrol car, you can still get from A to B at a relatively low cost.

Peugeot 108

First on sale in 2014, the Peugeot 108 is the quintessential economical car. It has an official mpg of just under 59mpg, thanks to a modest 1-litre engine and small, lightweight design. That does pose some issues for practicality, with the car and its 180-litre boot more suited to people travelling alone or as a pair. However, if you’re looking to cut costs, it’s hard to go better than this reliable city car.

Citroen C1

Like our top diesel contenders, we have another case of two similar cars matching each other stride for stride. The Citroen C1 is another economical car powered by petrol, with the same mpg as Peugeot’s city car – though it does come with a slightly bigger boot.

Keep your car economical

With the cost of fuel at an all-time high, not to mention everything else rising in price, it’s never been more important to have a car that’s economical to run. Invariably, that means you’re better off with newer models that are more fuel-efficient.

With My Car Credit, you can make your purchase as economical as your up-to-date car. We compare finance from our established network of lenders, saving you time while ensuring you get an affordable deal that spreads the cost of your next car.

If you have any questions about our process, don’t hesitate to contact our team on enquiries@mycarcredit.co.uk and we’ll get back to you as soon as we can.

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Borrowing £7,500 at a representative APR of 10.9%, annual interest rate (fixed) 10.87%, 47 monthly payments of £191.50 followed by 1 payment of £201.50 (incl. estimated £10 option to purchase fee), a deposit of £0.00, total cost of credit is £1,702, total amount payable £9,202.

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At My Car Credit, we understand that when it comes to purchasing your dream set of wheels, budget can be a barrier. This is where Personal Contract Purchase (PCP) finance comes in. Flexible and affordable, the auto finance option is one of the most popular ways to purchase a car in the UK.

What is PCP car finance?

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Return the car

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Equity potential

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Mileage restrictions

Condition requirements

Final payment required to own the car

Total cost may be higher

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Choose a car with slow depreciation

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Look for low APR deals

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