Approved for HP but not PCP

sufcboy

Looking for a new car and on one of the ones I’ve seen on auto trader it lets you do a soft credit search to see the likelihood of being accepted for a finance agreement. 

However it has returned with results that I have a high chance of being accepted for a HP but then a low chance of being accepted for a PCP on the same car despite the HP being a lot more a month than the PCP. 

Any ideas why this is? As it doesn’t make much sense 

Veteransaver

Could be to do with the car (ie they don't want to do a PCP for anyone on that vehicle).
Is the interest rate higher on the HP (could be you are seen as high risk so they will do hp at higher rate but not a PCP at lower rate?

Goudy

Different finance companies might be offering the two different finance packages and the one offering PCP doesn't like the circumstances of either you or more likely the car.

They could be the same company and still don't like the circumstances surrounding the PCP deal on that car.

Generally PCP on a used car isn't great, particularly if the value of the car at the end of the term (the GFV) is very low or these days it seems, too volatile.

This can make then too unprofitable to offer even with the high rates of interest they seem to have.
They don't like being caught out with a car at the end of the PCP that still owns them thousands yet is worth hundreds.
You aren't likely to pay the GFV on it, so will hand it back and they aren't going to risk taking that hit.

On the PCP deals you can find on used cars, the interest rates tend to be very high and they certainly don't come with any incentives, like deposit contributions.
They try to cover this end of term profitability issue with much higher interest rates so they are almost certain to come out on top.

I would suspect if you changed your prospective car to a nearly new or much younger model you will find deals being offered with these high interest rates but I suggest you look at the overall cost of purchasing.

Work out how much you will spend on the car as a total, with the interest.
I would hazard a guess the straight HP would be far cheaper overall but the monthly payments would be higher and you are paying for the total value of the car.

Nearlyold

Don't know how much info a soft search obtains - however it could be related to mistaken concerns you may be the type of borrower who takes out a PCP with a low mileage limit to reduce the monthly cost, then does a monster mileage and hands back the car using Voluntary Termination to avoid (or at least try to avoid) any over mileage charges