Is 2025 The Perfect Time To Buy A Car? Here’s How To Finance It Right

👉 When is the best time to buy a car?
👉 Types of car finance explained
👉 The best time to finance a car? All signs point to 2025

Buying a car should be exciting… but for many, it comes with a dose of stress, especially when it comes to how to pay for it.

In 2025, car buyers have more car finance options than ever before, which can feel overwhelming without the right guidance. Understanding how each option works can help you make a confident, informed choice. In this article, we’ll explore the main types of car finance available and why 2025 could be the ideal time to finance your next car.

When Is The Best Time To Buy A Car?

There’s no perfect answer; the best time to buy a new car is when you need to. But if you're in the market now, 2025 offers strong conditions for buyers.

With interest rates lower than recent years and lenders running competitive finance deals, it’s a great time to secure a car loan. While prices may not have dropped dramatically, smarter finance options mean your money can go further.

Looking for the best deal? Read our blog on the best time to buy a car in 2025.

Types of Car Finance Explained

Hire Purchase (HP) Car Finance

How Does It Work?

With HP car finance, you pay an initial deposit, usually around 10% of the car's total value, followed by fixed monthly repayments over an agreed repayment term. Car loan durations can vary, but they’re typically between 12 and 60 months.

Worried about not having a deposit? Not all lenders require one, so a lack of savings doesn’t have to stop you from getting car finance. Explore Marsh Finance’s no deposit car finance options today.

Who Is It Suitable For?

HP car finance is ideal for people who want to own their car at the end of the loan without facing a hefty balloon payment.

It’s a straightforward option, and it makes managing your budget easier, as you know exactly how much you must pay each month.

We’d typically recommend HP car finance to people who want to keep the car for the long term and want to avoid mileage restrictions.

Personal Contract Purchase (PCP) Car Finance

How Does It Work?

With PCP car finance, you typically pay lower monthly repayments in comparison to HP. This is because you’re only paying off the car’s depreciation.

You’ll pay an initial deposit followed by a fixed monthly amount over an agreed repayment period, which is typically between 24-48 months.

At the end of your PCP agreement, you’ll have 3 options:

• Pay your balloon payment to own your car outright
• Return the car
• Part-exchange the car for a new one and start a new agreement

Worried about the deposit?

At Marsh Finance, you don’t always need one. We offer no-deposit PCP car finance options, so you can get behind the wheel without upfront costs getting in the way.

Who Is It Suitable For?

PCP is ideal for individuals who enjoy changing cars frequently and want lower monthly repayments. It offers flexibility and options at the end of the agreement, giving you the freedom to choose what suits you best.

PCP is pretty popular with individuals who like driving the latest models without committing to ownership.

PCP car finance is usually reserved for individuals with perfect credit scores. Only two lenders in the UK offer PCP to individuals with less than perfect credit, and Marsh Finance is one of them! Learn more about our non-prime PCP car finance options here.

Personal Loan

How Does It Work?

A personal loan usually involves borrowing a fixed amount from a bank or lender, which you repay over an agreed-upon term. Personal loans usually run for 12 to 84 months. Unlike PCP or HP car finance, a personal loan is not tied to the car. This gives you flexibility to shop around and negotiate the best deal.

Who Is It Suitable For?

Personal loans are best suited to those who want flexibility in choosing a car, as you’re not limited to a specific dealer.

If you have a good credit history, you may qualify for lower interest rates than you would get with car finance, which makes a personal loan a cost-effective option.

Personal loans are also ideal for people who want outright ownership of the car from the start and do not want to be tied into mileage restrictions.

Leasing

How Does It Work?

Leasing involves paying a monthly fee to use a car for an agreed period of time, usually 24 to 48 months, and then returning the car. Unlike HP or PCP, you don’t have the option of buying the car at the end of the lease, unless you negotiate a deal with your car leasing company.

Who Is It Suitable For?

Leasing is ideal for individuals who prefer to drive the latest models every few years without the hassle of ownership or worrying about depreciation

The Best Time To Finance A Car? All Signs Point To 2025

Competitive interest rates:

The Bank of England base rate has dropped, meaning that borrowing is more affordable than in previous years.

With lower interest rates, you can finance a car at a lower cost, saving you money in the long run.

Learn more about 2025’s car finance interest rates and what they mean for your wallet.

Car Finance Promotions:

Car dealerships and lenders are offering some fantastic promotions, including our very own £200 cashback offer at Marsh Finance.

When you finance your car directly with us, we’ll take £200 off your first monthly payment.

It’s simple, quick, and puts money back in your pocket. Apply now and drive away with a great deal.

Economic Stability:

The economy is finally showing signs of recovery, which means that car finance lenders are more confident in lending to consumers. Economic stability lowers lenders' risk, often resulting in better loan terms and higher approval rates.

Want to learn more about car finance interest rates? Check out our guide to APRs here.

Technological Advancements:

Modern cars offer advanced safety features, improved fuel efficiency, and cutting-edge smart technology. Upgrading to a newer car allows you to access these benefits sooner, making every drive safer, smarter, and more enjoyable.

Ready to finance your next car? 2025 is the perfect time to take the leap.

With lower interest rates, strong lender confidence, and more flexible car finance options than ever before, 2025 is shaping up to be the ideal year to finance a car.

Whether you’re considering PCP, HP, leasing or a personal loan, understanding your options is key to making a confident, stress-free decision. At Marsh Finance, we offer flexible car finance solutions, including no-deposit deals and non-prime PCP, to help you drive away in the right car, on the right terms.

Ready to explore your options? Start your car finance journey with Marsh Finance today. 👇