Loan or PCP

savannatim

Hi All,

Im looking at getting a loan for £15000 for a new car but i have a question. If i get declined for the loan (not sure if i will or not yet) is there a chance i will get accepted for PCP? Id rather go down the loan route but if i do get declined then i dont really want to embarrass myself at the dealership by getting declined for PCP either!

Can anyone offer advice?

bengalknights

Generally as its secured against the car you would just get charged a higher interest rate if they think your not credit worthy.

National_Debtline

Hi savannatim


All things being equal, there should be a greater likelihood of you being approved for the PCP than for a loan to buy the car outright. With PCP, you are effectively borrowing less than in the case of a cash loan, as the car's predicted value by the time of your final payment is taken into account (this predicted value effectively becomes the "balloon payment" you must make to acquire the vehicle outright).


Of course, any searches done when seeking the cash loan will be reflected on your credit file, but I imagine that car dealerships anticipate this scenario cropping up fairly frequently, and they may be prepared to be flexible on price etc. if it helps secure a sale.


Dennis
@natdebtline