Advice for buying a used car on finance

By Swansway Motor Group

13 Sep 2023

For individuals looking to purchase a used car but are either unsure on their chances of securing a personal loan, or struggle to fund the amount via savings, car finance packages such as a Personal Contract Plan (PCP) could be a viable option.

Many car brands offer additional benefits for purchasing a vehicle using such finance packages, one example of this is Audi Approved Used: plus, an enhancement on the standard Approved Used offering for Audi drivers who opt to purchases a PCP.

All Audi Approved Used vehicles are meticulously inspected by brand experts and repaired using genuine Audi parts before they appear on the forecourt. Currently the standard Approved Used offer from Audi entitles customers to:

  • 30-day exchange plan
  • 1 year Warranty with roadside assistance*
  • 2 services included^
  • Up to 150 exacting checks to pass
  • Service history
  • Up to 12 months MOT Cover**
  • Reconditioning with Audi original parts
  • 1 year Key cover**
  • History and mileage checks
  • Complimentary Audi driveaway insurance

Approved Used: plus provides additional benefits for drivers who buy an Approved Used Audi on PCP. These benefits are:

  • 2 years Warranty*
  • 2 years roadside assistance*
  • Up to 2 years key cover**
  • Up to 2 years MOT cover**
  • Up to 2 MOTs as needed***
  • 2 services included^
  • An additional £250 deposit contribution (vehicles up to 36 months old at point of acceptance) †

PCP is just one of three main finance options available when purchasing a used vehicle, the others being Hire Purchase (HP) or, a personal loan. 

Hire Purchase is the simplest form of car finance available. You pay a deposit, usually around 10% of the cars value and then make fixed monthly payments over an agreed period. This does mean that until the final instalment is paid the car is not yours, so if you miss a payment, you risk losing the car.

You must also wait until after the final payment is made before you can sell the car, as the loan was taken out against the car. However, one of the biggest benefits of Hire Purchase is that the payments are fixed so there is no concern that the monthly payments will not increase or decrease and once the final payment is made, the vehicle is yours with no balloon payment to pay.

PCP itself is like Hire Purchase in that you will be making monthly payments however, rather than paying for the car itself, you will be paying off its depreciation. Once again, PCP requires you to pay a deposit, usually around 10% of the vehicle’s worth. Following this you will pay monthly payments which pay off the car’s depreciation, these payments will include interest on top. At the end of the contract, you will have three choices: 

1.       Pay the balloon payment- meaning the car will be yours to keep.

2.       Hand the keys back- the contract is over, and you can return the car and walk away (subject to mileage and return condition charges).

3.       Get a new car- if your car is worth more than expected, you can put the equity towards the deposit of a new car. 

Using a personal loan to buy a car essentially means you will buy the car outright and repay the loan to whoever the lender is. One of the benefits of personal loans is that there is a wide choice of loan providers, including banks and building societies with a wide offering of terms. 

Audi Approved Used: plus Terms and Conditions

Offer valid for purchases made from 01/08/2023. Applicable to vehicles purchased with VWFS Solutions Personal Contract Plan (PCP). Non-Audi models are excluded. UK residents only. Over 18s only. Subject to status.

* Warranty valid for vehicles up to 8 years old and up to 100,000 miles at point of activation.

** MOT Cover and Key Cover is up to 2 years and is underwritten by Bespoke Underwriting Ltd on behalf of Watford Insurance Company Europe Limited and administered by Lawshield UK Limited.

*** Customer will receive up to 2 MOTs as required for the next 2 years: Vehicles under 1 year old – no MOTs included Vehicles between 1 and 2 years old – 1 x MOT included Vehicles 2 years and older - 2 x MOTs included

^Service Plan covers next two consecutive services limited to 1 x Oil Service and 1 X Oil Inspection Service with Pollen Filter. Excludes A8, S8, RS models and R8.

†£250 deposit contribution on vehicles up to 36 months old. Indemnities may be required. T&Cs Apply. Offer subject to change or removal at any time. Accurate at publication date 08/2023. At the end of the agreement there are three options: i) pay the optional final payment and own the vehicle; ii) return the vehicle: subject to excess mileage and fair wear and tear, charges may apply; or iii) replace: part exchange the vehicle. With Solutions Personal Contract Plan. Indemnities may be required. Subject to changes in vehicle or equipment prices. Not available in conjunction with any other finance offer. Freepost Audi Financial Services.

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