The Definitive Guide To Used Car Finance

How does used car finance work? Here’s how to finance your next used car

There’s a lot of debate on the best way to finance a used car and our customers ask us a lot of questions around how does used car finance work and what’s best for me. Here, we’re going to give you all the details you need to help you finance your next used car. But first, you might like to go to our used car locator, where you’ll find a wide selection of low-mileage and carefully prepared used cars for you to browse. Then, just get in touch or drop in to your local Brayleys dealership for a test drive!

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The best used cars at Brayleys

Because Brayleys is a multi-franchise dealership, we have access to a wide range of quality used cars that we have taken as trade-ins, but only the best make it onto the Brayleys forecourt. What’s more, every used car we sell has been fully checked by our team of manufacturer-trained technicians, so you can drive away confident in your car’s reliability, safety and history. We want to make buying a used car from us as enjoyable as possible, so all our used cars are easy to browse online through our used car locator. All you have to do is enter some details about the sort of car you would like and you’ll be offered a range of cars that meet your criteria. Our multi-franchise expertise means we can offer you an excellent choice of used Honda, used Kia, used Mazda, used Renault, used Dacia and often some models from other manufacturers too. You’ll get all the peace of mind of buying from a reputable main dealership, but you’ll find our pricing is competitive and we often have some excellent deals available as well.

What is PCP?

A Personal Contract Purchase or Personal Contract Plan is now a popular way to finance a car purchase. Often abbreviated to PCP, a Personal Contract Plan allows you to make low monthly repayments with a low rate of interest. It’s possible to keep your monthly costs low and more easily affordable because your initial deposit and all your monthly payments to the end of the contract period usually leave about a third of the cost of the car outstanding. This means you’re actually only paying the amount that the car is depreciating during your use of it.

A PCP is based on you keeping the car in good condition and having it regularly serviced in line with the vehicle manufacturer’s recommendations. That means that when the PCP contract ends, you can return the car to us and you’ll owe nothing more. You’ll then have the opportunity to enter into a new PCP deal with us for a more up-to-date used car. In essence, a PCP resembles a long-term car rental agreement, where, about every three years, you can take out a new PCP agreement with us and benefit from having a newer model.

There’s also the option at the end of the PCP agreement of paying off any outstanding finance on your car. This is often referred to as the balloon payment, and if you pay this amount off, then you would own the car outright. To protect you, if the value of your car goes down, we set a Guaranteed Minimum Future Value (GMFV), prior to you entering into the PCP agreement. This is also to your benefit if the value of your car goes up, as you can use that additional value in your car to cover all or part of your deposit for a PCP contract with us on another car.

A PCP agreement also specifies the maximum mileage per year you’re able to do. This is agreed with you in advance. If you need to go over this agreed mileage, you can do so, but you will have to pay a small charge for every excess mile.

And what about HP?

Hire Purchase agreements have long been accepted as an easy way to buy high-cost items, without the need to dig into savings and to be able to get the car or other item that you want right now. Usually abbreviated to HP, a modern Hire Purchase agreement is your perfect choice, if you want to own the car at the end of the contract term. Financing your next used car with HP allows you to put down a low initial deposit, and then over the pre-agreed term, you’ll make monthly payments to pay off the outstanding finance.

You won’t actually own the car until you’ve paid off what is basically a loan, secured against the car. An HP agreement has the advantage that you won’t be subject to any excess mileage charges. However, the car isn’t yours until the end of the agreement, so you can’t sell it without first settling all outstanding finance on it.

If you have any questions about car finance, PCP or HP, please get in touch. We would be more than happy to help you.

Brayleys makes it simple: used car finance

For more information about our used cars and your used car finance options, please call us or send us a used car enquiry

Approved Used Car Finance Enquiry Approved Used Cars

Terms and Conditions: A minimum 18 month finance term and minimum £2,500 balance to finance apply. Finance applicable at participating Brayleys dealers and are at the promoter's absolute discretion. Finance is only available to persons aged 18 or over, subject to status. Subject to availability. Terms and conditions apply. All figures are correct at time of publication but may be subject to change. Credit provided by Honda Finance Europe, Mazda Financial Services, RCI Financial Services, Kia Motors Finance.

Brayleys is authorised and regulated by the Financial Conduct Authority, Financial Services Register number 0000277531. Brayleys Cars Limited may introduce you to a number of finance providers where a commission may be received. This introduction is not independent financial advice. Brayleys Cars Limited Lyon Way, St Albans, Hertfordshire AL4 0LQ is authorised and regulated by the Financial Conduct Authority.