PCP or HP approval

Windlepoons

I'm probably going to be in a position to make the balloon payment early on my car in the next couple of months, and will be trading it in for a different car.

I'll be looking to finance the new (used) car, I understand the difference between PCP and HP will be higher monthly payments and the car would be mine at the end of it, and PCP will be lower monthly payments but with a balloon payment at the end (and probably a higher Apr)


What is more likely to be approved, PCP or HP finance, or as they are both secured against the car is there no difference in approval rates?

Cheers

foxy-stoat

Approval is based on your details, I would imagine as they are both secured on the vehicle then either is as likely to get approved.

System

If you're going to be paying the balloon payment anyway why not keep the car you currently have ? The only thing getting a new one on HP or PCP does is pointlessly set on fire thousands more in depreciation and loan interest that could be being saved up to pay for the next replacement after that.

It makes much more sense to do it with this car especially given in the next few years there are going to be A LOT more electric vehicles on the road, the prices of those will fall and that may be a way you consider going in the future.

Windlepoons

The current car is on 0% Apr so luckily no interest, although it was new and like all new cars had a massive hit in value.

The car I am looking at is a used car that holds its value a lot better, and is something I currently have my heart (not my head) set on , but the PCP or HP will not be 0% so instead of taking 1000s in depreciation o will probably get a couple of thousand interest.

I'll probably see sense between now and then, but was just curious

DrEskimo

PCP will likely have a lower APR, but in terms of actual interest paid, the HP will be cheaper.

Best bet will be to look at getting a low rate unsecured loan from your bank or high street store for the lowest possible amount, and pay it back as quickly as you can.