Choosing the right car is a big decision, but often choosing the right finance is just as tricky. However, it’s really important to understand the consequences of your choices before committing to anything, so to help you,

Here’s a quick guide to the various vehicle payment options you may want to consider.


Cash is almost always the most cost-effective means to purchase an item. With no interest rates attached, it’s a straightforward transaction with immediate ownership so a highly beneficial choice. The downside, of course, is that we don’t all have the funds immediately available to us to purchase outright. It’s in these circumstances that you may want to consider the following options as an alternative.

Personal Loans

Opting for a personal loan means you can have quick access to the funds you require and ownership of the vehicle is immediately transferred to you. However, the repayment term is generally short which means your monthly repayments could be higher, compared to if you spread the cost over a longer term. A secured loan, like those available from Nemo Personal Finance, can be an alternative to a personal loan, allowing you to spread the loan amount over a longer term; naturally reducing your monthly repayments compared to a personal loan but you are likely to pay back more overall if the term of the secured loan is longer. Remember, a Nemo loan is secured on your home so you must ensure you can afford the repayments.

Hire Purchase

Hire purchase allows you to make fixed monthly payments over an agreed period, in the same way as you would with an ordinary loan, but the car you choose does not become yours until you make your final payment. This means that if you default on your repayments, you could lose your vehicle and the money you’ve already paid. However, this can still be an ideal option for those with limited funds.

Car Leasing

This works similar to a long-term rental, meaning that you pay a fixed monthly amount to use the car until the contract expires. There are two main types to choose from: personal contract hire and personal contract purchase. Although this choice offers an opportunity to reach an arrangement that suits you, the downside is that you’ll never own the car outright. However, payments tend to be significantly lower than other finance alternatives, making this a great choice for drivers on a budget.

If you’re looking to purchase a car, any of the above options could be appropriate.


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