The £20K Challenge: Smarter Car Finance For Budget-Conscious Buyers

According to Auto Trader’s June 2025 Market Intelligence Report, 78% of used car buyers are now shopping below the £20,000 mark.

This isn’t just a passing trend. It’s a clear message from the market: buyers are still active, but they’re cautious, and affordability is king.

For car dealers and brokers, this creates both a challenge and an opportunity. The challenge is competing in a price-sensitive space. The opportunity lies in how we use innovative finance to help customers make confident, affordable choices.

At Marsh Finance, we work with partners across the UK to structure finance that matches modern buyer behaviour, especially for the near- and non-prime segments. Here’s what’s changing and how to respond.

✔️ Why £20K is the new decision threshold

✔️ Key finance products that work under £20K

✔️ What this means for dealers and brokers

✔️ How Marsh Finance can help

✔️ Let's turn £20K into an opportunity

✔️ Ready to meet the market where it is?

Why £20K Is The New Decision Threshold

A few things are driving this shift:

• Higher living costs and interest rate sensitivity mean customers are working to monthly budgets, not just sticker prices
• Used car stock levels are stable, but buyer expectations are more cautious
• Online affordability tools are encouraging buyers to self-select lower finance brackets before even making an enquiry

This means many customers who would once stretch to £23K-£25K are now aiming to keep things under £20K, not just for comfort, but to improve approval odds and stay in control of repayments.

Key Finance Products That Work Under £20K

1. PCP: Even for Non-Prime Buyers

PCP has long been the go-to for making cars feel affordable, and for good reason. It allows for lower monthly payments, thanks to the deferred optional final payment.

What’s changed?

• Shorter-term PCPs (24–30 months) are becoming more popular, especially for used cars priced between £12K–£18K
• These shorter cycles suit buyers who want flexibility or who are rebuilding their credit profile

Marsh Finance is one of only two UK lenders currently offering PCP in the non-prime space, opening up this affordability-first product to more of your customers.

2. Traditional HP: Simple, Clear, Reliable

While PCP offers flexibility, Hire Purchase remains a popular choice for buyers who want to own their car outright and avoid mileage or condition clauses.

• It’s easy to explain
• Ideal for customers wanting a straightforward path to ownership
• Suits lower-value vehicles (£6K–£14K) where PCP doesn’t always make sense

HP remains a trusted option, particularly when paired with tools like soft search and same-day approvals.

3. Deposit Flexibility and Lower Terms

With buyer affordability under pressure, it’s not just the monthly figure that matters; deposit structure and term flexibility make a difference too.

We’re seeing increased demand for:

• Longer terms (up to 60 months) to lower monthly payments on lower-value vehicles
• Variable deposit options: particularly useful for younger buyers or those with stretched budgets

Offering structured flexibility can mean the difference between a “maybe” and a “yes.”

What This Means For Dealers And Brokers

For Dealers:

• Stocking the right price point is crucial, under £20K is where volume is moving
• Focus on advertising finance affordability early in the journey, not just APR
• Digitally highlight finance options to increase enquiries and walk-ins

For Brokers:

• Lead with finance structures that support lower vehicle values
• Match customer credit profiles with flexible lenders, especially for PCP below prime
• Offer customers confidence tools: soft search, instant decisions, clear terms

Both sides benefit when the finance offer matches the customer’s real-world circumstances.

How Marsh Finance Can Help

At Marsh Finance, we support both dealers and brokers with:

• Flexible PCP and HP products, including non-prime
• Soft search tools that protect customers’ credit files
• Fast decisions and transparent criteria
• Support for customers with lower deposits and lower credit scores

We're not just another lender. We’re a partner in helping you close more deals, especially in this fast-moving, budget-sensitive market.

Let’s Turn £20K Into An Opportunity

The market may be shifting, but the appetite to buy hasn’t gone anywhere. Dealers and brokers who adapt their finance strategy to meet real-world budgets will be the ones who win.

Ready to Meet the Market Where It Is?

At Marsh Finance, we help dealers and brokers turn cautious buyers into confident ones, with flexible PCP and HP products, fast decisions, and specialist support for non-prime customers.

If you’re looking for a finance partner who understands the sub‑£20K market and moves at your pace, we’re ready when you are.

👉 Partner with Marsh Finance today →

Let’s give your customers more ways to say yes.

Ready To Meet The Market Where It Is?

At Marsh Finance, we help dealers and brokers turn cautious buyers into confident ones, with flexible PCP and HP products, fast decisions, and specialist support for non-prime customers.

If you’re looking for a finance partner who understands the sub‑£20K market and moves at your pace, we’re ready when you are.

👉 Partner with Marsh Finance today →

Let’s give your customers more ways to say yes.