Financing new car - HP or car loan

Sparks20

New Member
Messages
4
I’m looking at buying a new car - current one is 13 yr old which is just starting to give more trouble than it’s worth.

I’m looking at buying brand new and the dealer is offering 0% fixed APR for 4 years if purchasing through HP.

Just wondering if it’d be better to go this route or get car loan? Have never used HP when purchasing before.
 

RedOnion

Frequent Poster
Messages
5,261
Is it HP or PCP? The big question is what balance will be left outstanding at the end of 4 years, and how will you pay that off? One of the reasons car brands are offering 0% finance is to try get you into a cycle of buying a new car when the 4 years are up.

I'd suggest taking a look at this key post, which will give you some guidance at least on what to look out for.

 

Sparks20

New Member
Messages
4
Hi @RedOnion

It’s HP.

I’d have the finance to go at least halfway towards the cost in the form of the deposit at the outset. It would just make things easier financially to be able to pay off the remainder in instalments/monthly repayments over a period. Just not sure if these 0% offerings are too good to be true sometimes.

Finance amount €14,850
Term 48 months
Total cost of credit €0
Monthly payments €309.38
APR 0%

The above is indicative of what the finance calculator provided but I’ll suss out the finer details with the dealer. Presumably there would be fees etc. on top of that

Will take a read of the post, cheers
 

RedOnion

Frequent Poster
Messages
5,261
Ah, that looks good. You're paying off the entire balance, so there's no residual.

If they quote 0% APR then there are no fees. Usually with HP theres a €63.50 documentation fee, but they have to waive that in order to advertise as 0%.
 

seánieboy

Frequent Poster
Messages
159
i would say HP. i bought a kia 4 years ago and was dubious about the 0% HP offer . so i took out the finance over 4 years and i paid it off in 2 years and absolutely no penalty. To me there are too many snags with a PCP
 

Coldwarrior

Frequent Poster
Messages
311
Hi @RedOnion

It’s HP.

I’d have the finance to go at least halfway towards the cost in the form of the deposit at the outset. It would just make things easier financially to be able to pay off the remainder in instalments/monthly repayments over a period. Just not sure if these 0% offerings are too good to be true sometimes.

Finance amount €14,850
Term 48 months
Total cost of credit €0
Monthly payments €309.38
APR 0%

The above is indicative of what the finance calculator provided but I’ll suss out the finer details with the dealer. Presumably there would be fees etc. on top of that

Will take a read of the post, cheers
What car is it? 0% HP over 4 years sounds good.
 
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