Unless you are lucky enough to have the full cash amount sitting in your bank account, you will likely need finance to get that new motor on your driveway. In the UK, nearly 90% of new cars are bought using some form of credit. But which type is right for you? It isn't one-size-fits-all. Let’s break down the four main ways to finance a car in the UK in plain English.
It’s being called the " new PPI, " and for good reason. The UK’s car finance scandal is exploding, with analysts predicting that banks could owe drivers up to £20 billion in refunds. If you bought a car on finance anytime in the last 15 years or so, you’ve likely seen the headlines and wondered: "Am I one of the millions affected?" The confusing part is that you probably wouldn’t know if you were mis-sold anything. The car worked fine, and the monthly payments seemed manageable at the time. But beneath the surface of millions of PCP and HP deals, a hidden practice was costing consumers hundreds, sometimes thousands, of pounds extra in interest.
If you’ve been following the news about mis-sold car finance, you know it’s been a rollercoaster year. From high-court battles to regulatory pauses, the landscape has shifted significantly. As we head into 2026, millions of UK drivers are finally seeing a clearer path toward compensation.