UK Car Loans
Loans aren't the only way to drive a better car
In the UK car loans come in all shapes and sizes: in addition to standard repayment loans, a new type of loan cuts the repayments but leaves a big bill at the end of the loan period. You can either stump up the extra cash, walk away, or start the process all over again.
In the UK car loans have become much more complicated, with some amazing-looking deals that can give you a new car for a tiny monthly payment. Such packages are variations on a loan called a Personal Contract Plan (PCP), which only finances part of the car.
With a PCP you can drive away a new car, paying a relatively low monthly amount, and the lender – usually a division of the car manufacturer itself - sets a guaranteed final value. If you stick to the mileage limits and don't treat the car badly, you'll be given the option of buying the car for the guaranteed final value once the loan period is over; alternatively you can walk away, or start a brand new contract from scratch.
Unlike normal UK car loans where you own the car as soon as you've made the final payment, with a PCP you only get the car if you're willing to pay the guaranteed final value. It does give you the opportunity to drive a much newer or better car than you might otherwise be able to afford, but it's not as flexible as a genuine car loan.
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