UK Car Finance Basics Explained - PCP VS LOAN vs LEASE vs HP

UK Car Finance Basics Explained - PCP VS LOAN vs LEASE vs HP

When buying a new or used car you need to carefully consider how you want to finance the purchase and also consider is leasing a car may be a better idea for you. THis little 2021 buying a new car vlog should help you understand all the options.

PCP VS LOAN vs LEASE vs HP is a long-standing dilemma that people find themselves faced with every day.

PCP is a personal contract purchase, this means you pay a deposit, a number of monthly payments, then if you want to keep the car you pay a further balloon payment to take ownership of the car from the finance company. If you don't want to keep it you can simply hand it back at the end of the finance agreement.

HP is HIre Purchase, with this op[tion you simply pay a deposit and then make monthly payments, at the end of the agreement you own the car.

BANK LOAN has a number of advantages, 1) it's often the cheapest way to borrow the money for your purchase (just not always) 2) the finance is against you and not the car, this means you can change the car as you wish, you could even sell the car and spend your money on something else. The car is yours immediately, as is the debt. With the PCP and HP the finance company is the owner of the car until the agreement is settled giving you less flexibility.

PCH / Personal Contract Hire / LEASING is the only one where you are not guaranteed the option to buy the car at the end (although you often do get the option) - so why would you do this??? hopefully the video explained why owning a depreciating asset is not always a great idea and getting into a good leasing deal can be a very economical way of driving a new car. Should you lease vs buy a car? you decide.

PCP VS LOAN vs LEASE vs HP is an old question for which many have answers but not too many truly understand the dynamics, hopefully, this video will help you to become someone who understands car finance and helps you to make great choices when getting your next new or used car.

At the end of the video I look at a real world example of car finance on the brand new 2021 Peugeot 3008 GT - it's not a typical example at all which is why I suggest you always shop around for any kind of car finance and carefully consider all of the options before you buy or lease a car.

00:00 Intro
00:39 Basic Car Finance Options Explained
06:20 2021 Peugeot 3008 GT - Car Finance Examples
11:34 Outro

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[Bzrkology]

Legend. This is golden information, thanks for breaking it down !

[chriswong]

Excellent video! You're definitely a guru indeed! Thank you very much for breaking down these valuable information!

[kirangabri]

Finally you’ve cleared the murky waters, very helpful

[jockster]

Brilliant thanks for your efforts 👍.. thoroughly enjoyed the explanation

[ryanlebear]

This video is really helpful, thanks! I've been looking at leasing, but finally decided to go for a slightly older higher spec model and buy it.

[chriswright]

Being trying to get my head around this leasing lark for a while and this explained it as best as I have seen before. Thanks for that and in my mind now I have a far better grasp of it all.

[Pixelheist]

You sir are a saint, thanks for explaining this clearly to a doyle like myself who couldnt get it through his thick skull! Top banana!

[diracify]

Thanks for this. I was always a person with 500 quid bangers but I am swaying towards finance due to needing something more reliable. This video has really helped my understanding! cheers mate.

[gerryking]

That’s really helpful and clear thanks. I have a much better understanding of the options now.

I’ve recently bought a ex demonstrator on a pcp and was a bit concerned about the balloon payment because I’ll be a pensioner by then. I might just decide to continue with the pcp then hand it back and use my bus pass at the end! 👍😊

[phpat]

Good video clearing up the bs for everyone

[simonmason]

Beautiful content, simple, concise. Easy to understand. Instant sub

[alastairc]

The way the hybrid / battery tech is on the fastest growth defo lease only so you can swap to a newer car tech every 3 years unless you buy a 4 year old at almost 60% of SP.Goid simple explanation 👌

[AgentGreyFox]

I've always gotten a low interest loan over 5 years. Then own the asset and trade it in. Always found this cheaper. Great video. Very insightful.

[sebastianborek]

Thank you "Car guru" - for me. You helped me to get my first lease on brand new Cupra Leon 300hp, the car I was after for many months.Just signed agreement today and expecting it right before Christmas.
Great chanel, very helpful with lots of useful bits what to look at before you make a final decision.. big thumb up 👍

[Dentos]

Hi Jim used Citroen c3 pure tech feel 3 up front10 k per annum non maintained through Arval at £126 per month 2029 plate 24000 miles is one example I used to be in the trade for over 40 years love your Chanel👍🥰

[Leonfr_]

Ordered my 3rd Lease car after previously doing pcps but ended up just handing them back or using for deposits! Leasing is the way forward, avoid the deprecation!!

[Smile]

My car was on a PCP contract. After two year being on the pcp contract I decided to apply for a loan (cash) and bought a car from dealer. Number one the car is yours and it is much better to have own balloon payment. It is very imported to look after the car (service, service book, etc).When you look after you car your car looks after you I mean you can sell it for the good price in future.

[johnroberts]

I suspect that most people are initially hesitant about leasing (I certainly was) but once you manage to overcome the psychological hurdle of not owning the car, realise that a PCP is basically exactly the same and then focus in on how much cheaper a lease deal almost always is then it becomes unarguably the way to go.
Nice clear and concise video Jim which will certainly help those leasing waverers to see the light! Thanks.

[Dentos]

Hi Jim what about doing a comparison on personal contract hire on new and up to three year old cars there’s some great deal on used and you could get the car you want to suit your budget

[Honda_Hooligan]

We're waiting for our leased Kia Proceed to be imminently delivered. As we're not hung up on owning our main family car and are planning to hand it back and continue with a new deal, it certainly made the most sense for us.