Which way to finance car?

kleapatra

Hi

I currently have a PCP on my car which is due to run out imminently - this arrangement has worked well for me. I am now looking at buying another car however I am unable to finance it using the same method (the dealer can't due to the age of the car). So my choice is to use the car dealer's finance or get a personal loan. I think (I haven't yet got any official loan quotes - just from comparison sites) I can get a slightly lower APR on a personal loan (I am pretty sure I will have no problem getting a good rate as I have a very good credit history) however I am aware that unlike the car finance that will be secured on the car, the personal loan will not be. I will be looking to remortgage/ apply for a new mortgage in the next few years - is there any preference over the car finance or personal loan with regards to any potential mortgage changes??
Basically I currently have no idea which method of finance to use and could do with some advice in case I've missed some advantages/disadvantages of one method over the other!

Thanks

nelly12

kleapatra wrote: »

Hi

I currently have a PCP on my car which is due to run out imminently - this arrangement has worked well for me. I am now looking at buying another car however I am unable to finance it using the same method (the dealer can't due to the age of the car). So my choice is to use the car dealer's finance or get a personal loan. I think (I haven't yet got any official loan quotes - just from comparison sites) I can get a slightly lower APR on a personal loan (I am pretty sure I will have no problem getting a good rate as I have a very good credit history) however I am aware that unlike the car finance that will be secured on the car, the personal loan will not be. I will be looking to remortgage/ apply for a new mortgage in the next few years - is there any preference over the car finance or personal loan with regards to any potential mortgage changes??
Basically I currently have no idea which method of finance to use and could do with some advice in case I've missed some advantages/disadvantages of one method over the other!

Thanks

You could have a Lease Purchase deal. Works like a PCP but the only difference is that the balloon is not guaranteed at the end of the agreement, so you can't just hand the car back.

Otherwise 60 month HP will give a not too dis-similar payment to a PCP.

Not sure though whether a mortgage underwriter will differentiate between a PL or HP agreement, would think they will view the same so go and get yourself the best deal you can.