Personal car leasing is car leasing specific to an individual rather than a business where: a person obtains a car from a leasing company or a dealer by committing to making an agreed monthly payment for a 2, 3 or 4 year period. they pay an upfront fee (usually 3 months if they have a CLICK TO READ MORE >>>

Lower, Fixed Monthly Payments - You only pay for the 2, 3 or 4 years that you use the car (i.e. not the entire cost of the car), so your monthly payments are often much lower than other finance options for the same car and same term. More Car, More Often – With lower monthly payments, you CLICK TO READ MORE >>>

For some people, a feeling of ownership is important, however, with car leasing you do not own the car as ownership is retained by the finance company. In such cases it becomes a trade-off between how important it is for you to own the car versus a lower monthly payment and an upgrade of a CLICK TO READ MORE >>>

Personal Contract Hire (PCH) is a personal car leasing product. You pay an upfront fee (usually 3 months depending on your credit rating) and then a monthly car lease fee to obtain a new car for a period of typically between two to four years but you do not have the option to buy the CLICK TO READ MORE >>>

Personal Contract Purchase (PCP) is similar to PCH in that in order to obtain a new car you pay a specified deposit, commit to a monthly payment over a period which is typically 2 to 4 years, and agree an annual mileage.  Legal ownership is retained by the finance company.  However, the difference between PCP CLICK TO READ MORE >>>

PCP is very similar to car leasing. However you have the right to buy the car at the end of the finance period (which is typically 2, 3 or 4 years) for a price that you agreed with the finance company when you obtained the car. The advantages of PCP are similar to car leasing CLICK TO READ MORE >>>

Until you make the final payment, the car is owned by the finance company. If ownership is important to you at the outset this may be a drawback. You will be limited to the annual mileage chosen initially.  If you exceed this and decide not to buy the car at the end of the contract, CLICK TO READ MORE >>>

Hire purchase is similar to buying the new car outright using finance but you do not own the vehicle until you make the final payment which is typically in 3 – 5 years’ time.  Hire purchase is a secured loan based on making monthly payments. Unlike PCH or PCP, you must pay for the entire cost CLICK TO READ MORE >>>

The advantages of Hire Purchase over a personal loan are: Hire purchase is cheaper because the finance company retains ownership of the car until you make your final payment (i.e. it is secured).  If you are unable to keep up your monthly payments then they will simply take the vehicle back. Hire purchase is widely available CLICK TO READ MORE >>>

When looking at hire purchase relative to PCP or PCH: You will be committed to a much higher monthly payment As you pay interest on the whole value of the car, hire purchase is not a good choice if you only plan to  keep the car for 2-3 years;Hire purchase is not a flexible option CLICK TO READ MORE >>>

A personal loan is an unsecured loan which a customer takes out to spend on whatever they choose.  It can be used for anything from buying a car to going on holiday.  It usually has a fixed cost and a fixed period. If a personal loan is used to buy a car, then the loan CLICK TO READ MORE >>>

A balloon payment is specific to certain contracts such as PCP. This is the payment that is made at the end of the finance or lease agreement. It is sometimes optional (as is the case with PCP when a person wants to take ownership of the car) or sometimes it is compulsory as is the CLICK TO READ MORE >>>

This is the predetermined fixed amount which the finance company guarantees the car will be worth at the end of the contract.