The truth about car finance and how to secure a smart deal in 2024. 

PCP & HP Car Finance has dominated the headlines recently after The Financial Conduct Authority (FCA) reported that some customers may have been charged too much on their finance agreement and might be entitled to compensation. So, what is this all about?   

In January 2021, the regulator, the Financial Conduct Authority (FCA) banned the use of ‘discretionary commission models’ when vehicle finance was being offered.  In other words, they have removed the ability at point of sale for the salesperson to determine how much commission was earned. Prior to January 2021 customers were able to negotiate a deal and as such were deemed by the industry to be fair.

Were all customers affected? 

No, for some, the discretionary commission model worked to their advantage and allowed them to negotiate a much better deal and pay significantly less in finance charges, some were not subject to these commission models at all. There is an ongoing investigation by the FCA, so we don’t yet know who may be entitled to compensation. 

Let’s talk about today. 

If you are in the market for a new or used car today and need car finance, why not use a trusted supplier, Magnitude Finance are rated 5-Stars on Trustpilot with over 1,400 reviews. 

It is important to know that the car purchase is separate from the finance, so in most cases you are free to shop around and look for an alternative quote.  You don’t have to accept the dealers offer, there is an alternative Personal Contract Purchase & Hire Purchase option. 

Since the changes, all dealers and finance brokers have to offer you a set rate of finance, the only thing that changes this rate is your credit profile, it will not come down with negotiation!  So why not compare the APR rates offered by the dealer with Magnitude Finance, your online specialist. 

The potential savings you could make on a car finance agreement at 8.9% vs 14.9% could cover the cost of your insurance or maintenance budget for the period, now that must be worth having!   

To make this easy to compare, we took a £20,000 car and applied a 10% Deposit over 5 years on a Hire Purchase agreement and these are the results; 

	Magnitude Representative Example	Dealer 1	Dealer 2
Vehicle Cash Price	£20,000.00	£20,000.00	£20,000.00
Deposit	£2,000.00	£2,000.00	£2,000.00
Loan Amount	£18,000.00	£18,000.00	£18,000.00
Term	60 Months	60 Months	60 Months
APR	8.90% (Representative)	12.90%	14.90%
Monthly Payment x 60	£369.79	£402.17	£418.55
Charge for Credit (inc £10 Fee)	£4,197.19	£6,140.44	£7,122.86
Total Repayable	£22,197.19	£24,140.44	£25,122.86
Extra Interest Paid		£1,943.25	£2,925.67

You can see that even on a low balance lend like £18,000, the savings are just under £3,000. 

Getting access to these market leading rates is really simple, all you need to do is find your ideal car, enter the registration number into the Magnitude calculator and within 60 seconds you will be offered our lowest APR, there is no need to haggle, we just give you our best rate first time, every time. 

How it works  

 
1 – Build Your Quote  
Enter the car details into the Magnitude Finance calculator. You can save as many quotes as you like. 

2 – Apply Online
Apply securely online and get a quick decision. Once approved, simply complete the eSign documents & ID verification online. 

3 – Collect Your New Car! 
We pay the dealer, and you collect your new car, it’s that simple. 

Why Magnitude? 

• Rates start from 8.9% APR with a representative APR of 8.9%. 
• Magnitude compares offers from an extensive panel of lenders. 
• Use a Trustpilot 5 Star rated team with expert knowledge.