Car finance for young drivers and students

Figuring out how to make ends meet when buying a new car as a student or young driver can be a confusing and exasperating process. You might be facing the prospect of paying off the remainder of your driving lesson fees at the same time as purchasing a new car and arranging tax and insurance (at a vastly increased rate) from scratch.

Paying for all this with just a student loan or income from a part-time job is unlikely to add up, and when you’re unfamiliar with the market, it can be difficult to know whether you’re getting the best long-term deal. But it doesn’t have to be like this! At Perrys, we understand the challenges faced by young drivers, so we’ve developed a set of innovative car finance packages that will have you on the road in no time.

PCP Finance

PCP car finance enables you to pay a smaller deposit at the start of your terms and shift your largest payment to the end of the agreement, giving you more time to save. The final payment (for Guaranteed Future Value, or GFV) will be worked out based on terms length and predicted mileage, and when the time comes to pay, you’ll have four options:

  • Pay the total outstanding amount and keep the car
  • Work out a new finance deal for the remaining amount
  • Sell the car and put down a deposit on a newer model with the surplus
  • Forgo the payment and hand back the keys

Benefits at a glance:

  • Lower deposit
  • Mid-term settlement option
  • Reduced monthly payments
  • Fixed monthly rate
  • Flexibility

Lease Purchase

Lease purchase is similar to PCP finance, but it is a model that works better with cars that hold their value over time. The method spreads costs as a monthly payment across the duration of the terms. A deposit is required at the outset and GFV payment at the end of your terms, which will be based on age and mileage. If the car retains its value, then the GFV payment will be significantly less.

Benefits at a glance:

  • Potentially lower GFV payment
  • Reduced monthly payments
  • Fixed monthly rate
  • Flexibility

Hire Purchase

Hire purchase is one of the simplest and most long-standing forms of new car finance. The deposit (which can be from a part-exchange) is deducted from the price of the car and the interest rate is added. This amount is then divided by the number of months included in the terms. The car then becomes yours to modify and keep once all payments have been made.

Benefits at a glance:

  • No large final payment
  • Fixed monthly payments
  • Terms up to 5 years
  • No risk to other assets
  • Save interest payments

Personal Loan

A personal loan is an amount given from a third party in order to fund your car purchase. You are then required to pay back according to the terms of the loan, but there’s extensive choice of providers and terms. The car then becomes yours once the loan has been paid off in full.
Perrys approve 9 out of 10 loan applications and the ease, flexibility and reliability of a Perrys loan has led over 50% of our customers to take up this option. Our application process can be completed in a matter of minutes, and is far less intrusive than that of a bank or building society. Alternatively, you can apply to a bank or building society for the same amount and pay back on their terms, but you will need to have built up a good credit rating.

The only drawback of a personal loan is that you will be required to sell the car to fund the loan payoff if you are unable to make the repayments further down the line.

Benefits at a glance:

  • Huge range of choice over terms
  • Terms up to 5 years
  • Perrys loan application is less intrusive
  • Adaptable to budget

According to the Finance & Leasing Association, over half of car purchases are now funded by dealer finance. As the arrangement is tied directly to the dealership, we can consider buyers with a lower credit rating, while manufacturer supported finance incentives sweeten the deal even further. Our arrangements give you financial flexibility and help you to get the most for your money, and we know that for students and young drivers, every penny counts.

If you want more expert advice on car finance, or purchasing a new car, why not stop by your local Perrys dealership today?