Personal loans & car finance
Lesson 8 of 12 in our free Borrowing guide: a 5-minute money game with the key points below.
This lesson is in the full version.
Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Borrowing is free for everyone.
Got a code? Unlock this lesson
Questions you'll answer
PCP deal: £1,500 deposit, £200 a month for 36 months, then a £6,000 balloon payment to keep the car. Total cost to own it?
Two personal loans for £2,000. A: £180/month for 12 months. B: £95/month for 24 months. Which costs LESS in total?
Quick facts
- Myth: “With PCP, you own the car once the monthly payments end.” — Not unless you pay the balloon. Otherwise you hand it back or part-exchange.
- Fact: “PCP deals often have mileage limits, with charges if you go over.” — Check the mileage allowance and excess charges before signing.
- Fact: “Missing car finance payments can lead to the car being taken back.” — The finance company owns the car until it's paid off. Talk to them early if you're struggling.