How it works: You pay a deposit, followed by fixed monthly payments for an agreed period of months / years. At the end, you can either:

• Pay the balloon payment to own the car.

• Hand it back and use any equity as a deposit on your next vehicle.

Best for: Keen car enthusiasts and drivers who like to change cars every few years or want lower monthly payments.

Ownership: Ownership is optional at the end of the term – but will require a balloon payment (a larger one-off payment) to complete the purchase.

Example finance quote (all figures are illustrative and example only)

Let’s imagine you’re looking to buy a used EV priced at £19,197 with 8,000 miles per year, and you choose a Personal Contract Purchase (PCP) agreement at 8.9% APR representative.

Here’s how your deal might look:

Car price: £19,197 (including £199 admin fee)

Customer deposit: £2,000

Amount of credit: £16,998

Term: 48 months (4 years)

Representative APR: 8.9%

Mileage: 8,000 per year

Monthly payments: £282.32

Optional final payment: £8,097

Total amount payable: £23,575.04

At the end of the 4 year agreement, you have three options:

• Keep the car – Pay the final £8,097 and the car is yours.

• Return the car – Hand it back with nothing more to pay (subject to mileage and condition).

• Part exchange – Trade it in for another vehicle, using any equity towards your next deposit.

How it works: You pay a deposit, then make monthly payments over a fixed term until the car is fully paid off.

Best for: People who definitely want to own their car at the end of the agreement. Payments are more than they would be for PCP because you’re paying the full cost of the car over the term.

Ownership: The car becomes yours once the final payment is made.

Example finance quote (all figures are illustrative and example only)

Let’s imagine you’re looking to buy a used EV priced at £19,197, and you choose a Hire Purchase (HP) agreement at 8.9% APR representative.

Here’s how your deal might look:

Car price: £19,197 (including £199 admin fee)

Customer deposit: £2,000

Amount of credit: £16,998

Term: 48 months (4 years)

Representative APR: 8.9%

Monthly payments: £419.42

Total amount payable: £22,331.16

At the end of the 4 year agreement, the car is yours to own.

How it works: You borrow money from a bank or lender, pay the dealer in full, and then repay the loan in monthly instalments.

Best for: This isn’t for everyone and is based on a number of factors. But it’s best for those with strong credit who prefer to own the car outright from day one.

Ownership: Immediate.

How it works: You rent the car for a fixed term and mileage limit, then hand it back at the end.

Best for: Drivers who want a new car regularly and aren’t bothered about owning it.

Ownership: Never - you’re effectively hiring the car long term.