Car finance. Let’s crunch the numbers

  • Check your eligibility with no impact to your credit score
  • Compare car loans, HP and PCP
  • Aro is a credit broker, not a lender
Car loans with Aro

Compare car finance

There’s more than one way to finance a car purchase, and you don’t need to have the cash to pay in full. At Aro, we can search over 50 UK lenders to pick out car finance options for you.


Personal loans

Personal car loans

Taking out a loan for a car allows you to you purchase your car in full, and then spread the cost across a longer repayment term. There’s no difference if you bought privately or from a dealership, and there’s no deposit, mileage restrictions or final charges to consider. The car is yours from the moment you make the payment.

  • Borrow up to £35,000
  • Spread the cost over one to seven years
  • Own your car fully from point of purchase
Hire purchase

Hire purchase

Hire purchase is a form of car finance where the value of the car is spread across the repayment term. There may be an upfront deposit, followed by monthly instalments. You may be able to purchase the car at the end of the contract or just hand the car back to the dealership.

Hire purchase agreements are secured against the value of the value of the car. You may lose the car if you cannot keep up with the payments. You won’t own the car until the final payment is made.

  • Borrow up to £200,000
  • Spread the cost over one to six years
  • Own your car after the final repayment
Car finance with Aro
Personal contract purchase

Personal contract purchase

Personal contract purchase (PCP) is similar to hire purchase, but it factors depreciation into the monthly repayments  – the way your car’s value will decrease over time. Your monthly payments may be lower compared with other types of finance, although there is usually an upfront deposit required.

You will have the option to make a larger payment at the end of your contract, known as a balloon payment. This will allow you to keep the car and own it, or you can hand the car back to the dealership.

  • Borrow from £10,000 to £35,000
  • Spread the cost over three to five years
  • Own the car after the optional final payment is made.
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Answers at your fingertips

What is a personal car loan?

A personal car loan is an unsecured loan which you can use to purchase a new or used car. With a personal loan, you borrow a fixed amount off a lender, then pay it back in monthly instalments plus interest over the loan term.

What is hire purchase?

With a hire purchase agreement (HP), the finance is secured against the value of the car. This means you won’t officially own the car until your last payment has been made. You’ll need to buy your car from a dealership that’s been approved by your chosen lender, then you’ll pay for your car in monthly instalments plus interest over the agreement term. Some lenders will need you to pay an initial deposit at the start of your agreement.

How much can I borrow?

Good question. Essentially, this all comes down to you and your situation. If you have a lower credit score or are already responsible for a number of credit repayments, you might find that the maximum amount you’re eligible to borrow is a bit less.

That said, typically personal loans range from £500 to £35,000 over terms of 1 to 7 years. If you’re a homeowner, you could also think about a homeowner loan. Homeowner loans tend to range from £5,000 to £500,000+ over terms of 1 to 30 years.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

For credit cards, all cards come with a minimum and maximum credit limit. The credit limit you’re offered will depend on your personal circumstances. If you’re not offered the maximum credit limit straight away, your credit card provider could increase your credit limit in the future.

If you’re searching for car finance, Aro can help you compare both hire purchase (HP) and personal contract purchase (PCP) agreements. Our car finance options could help you borrow up to £200,000 over terms of 1 to 6 years.

Which types of car finance can I check my eligibility for?

Here at Freedom, you can do a car finance eligibility check for both personal car loans and hire purchase agreements. If you’re eligible for both, you’ll see both options alongside each other in your search results. Moreover, checking your eligibility with us won’t harm your credit score.

What’s the difference between a personal car loan and hire purchase?

There are a few key differences between personal car loans vs hire purchase (HP) agreements:

So here’s a point by point breakdown.

  • You can borrow more with HP – up to £200,000;
  • HP agreements place the burden of security against your car, whereas a personal loan is not;
  • With a personal loan, you’ll always own your car from the point of purchase. But with HP agreement, you’ll own your car once you make the last payment;
  • You might need a deposit with for HP, you won’t with a personal loan;
  • You have more flexibility on where you can buy your car from with a personal loan;
  • There may be mileage restrictions with HP while you pay off your finance.

Warning: Late repayment can cause you serious money problems. For help go to moneyhelper.org.uk.

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