Car finance explained: understanding your options

Car finance has become one of the most common ways to get behind the wheel of a new car, because it lets you spread the cost over the duration of your finance agreement. Instead of paying for the whole car in one go, you usually pay an initial deposit followed by regular monthly payments.

The good news is Dacia keeps its cars straightforward, practical and good value, and the same idea applies when looking through the different Dacia finance options.

So, whether you’re looking at a compact electric Dacia Spring, a practical Sandero, a family-friendly Jogger or the SUV-style of a Duster or Bigster, you have support in making an informed decision about the finance type that is right for you. 

At its simplest, car finance is a way of spreading the cost of a car over an agreed period. You choose the car, agree the type of finance, decide on things like deposit and contract length, then make monthly payments (subject to status and affordability checks)*.

Different car finance solutions work in different ways. That’s why it helps to start by thinking how you’ll use the car. Are you likely to change cars every few years? Do you want to own it eventually? Do you drive a predictable number of miles? Are you choosing a car for personal use, or for your business?

Once you know that, you can select which finance type(s) feels right for you.

Whether you're looking for a new vehicle for personal use or managing a company fleet, there are several finance options that fit different needs and budgets. Choices include Personal Contract Purchase (PCP), Hire Purchase (HP), Personal Contract Hire (PCH), and Business Contract Hire (BCH).

Personal Contract Purchase, usually known as PCP, is one of the most popular types of car finance. It’s designed for people who like flexibility.

With Dacia's Personal Contract Purchase, you normally pay a deposit, followed by monthly payments over an agreed term. Those monthly payments don’t usually cover the full value of the car. Instead, part of the car’s value is left until the end as an Optional Final Payment.

Your options at the end of the agreement:

When the agreement ends, you usually have three choices. You can hand the car back, subject to potential excess mileage and condition charges. You can pay the Optional Final Payment and keep it. Or you can use any available value in the car over and above the Optional Final Payment amount as a deposit towards your next one.

That can work well if you like the idea of moving into a new Dacia every few years as PCP gives you flexibility in your choices at the end of your agreement, whether you wish to keep your vehicle or explore a different Dacia model when your agreement ends. 

Hire Purchase, or HP, is a finance solution that allows you to own the car at the end.

There’s no Optional Final Payment in the same way there is with PCP. Because you’re working towards owning the car outright, the monthly payments can be higher than PCP on a like-for-like basis, but with HP, mileage restrictions don’t apply.

HP could  be a good fit for buyers who are looking to own their vehicle at the end of the finance agreement. If you’ve chosen a Dacia Jogger because you need seven-seat practicality for family life, or a Sandero because you want simple reliable transport for years to come, HP may suit you well.

Your options at the end of the agreement:

With Dacia's Hire Purchase you usually pay a deposit and then make monthly payments over an agreed term. Once all the payments have been made, including any purchase fee, the car is yours.

Personal Contract Hire, often called PCH, is a form of leasing. You don’t own the car at the end, instead, you pay an initial rental, then monthly rentals for the length of the agreement and with an agreed mileage limit, and then hand the car back when it ends (excess mileage and damage charges may apply).

With Dacia's Contract Hire, this can be a useful option if you like fixed monthly budgeting and don’t want to think about selling or part exchanging the car later.

Your options at the end of the agreement:

It can work well for drivers who know their mileage, want a new car for a set period and are happy to return it at the end. For example, if you want a Dacia Spring Electric for regular urban driving and you know roughly how many miles you’ll do each year, Personal Contract Hire could be a simple way to run one without worrying about long-term ownership.

Car finance isn’t just for private buyers. Businesses can also use finance to help manage costs and keep vehicles up to date.

Dacia’s Business Offers are aimed at business users who want clear, practical options. Business Contract Hire can be particularly useful because it allows a company to run vehicles for a set period with predictable monthly rentals, then return them at the end (excess mileage and damage charges may apply).

That can suit businesses that need cars for staff, local deliveries, site visits or customer appointments. A Dacia Duster might appeal to a business needing something robust and practical, while a Spring Electric could make sense for shorter urban journeys where low running costs are a priority.

Your options at the end of the agreement:

Business users can use vehicles for a set period with predictable monthly rentals, then return them at the end (excess mileage and damage charges may apply).

The best car finance deal is not always the one with the lowest monthly payment. That might be important to you, but it’s only part of the story.

Other factors you may want to consider are the deposit, contract length, mileage allowance, whether you want to own the car, what happens at the end of the agreement and how the deal fits your real-life budget.

That’s where Dacia’s finance comparison tool can help. It lets you look at the different types of finance side by side, so you can see which one feels right to help you make an informed decision before going any further.

Browse current Dacia's Personal Offers and the wider range of Dacia car finance deals to see what’s available across the range. You can also contact your retailer to find out more.

Renault UK Limited trading as Dacia UK. Registered office: The Rivers Office Park, Denham Way, Maple Cross, Rickmansworth, Hertfordshire, WD3 9YS. Registered Number 82932 – England. Renault U.K. Limited is an appointed representative of RCI Financial Services Limited which is authorised and regulated by the Financial Conduct Authority (FRN: 312330).

Finance (excluding Contract Hire) is provided, by Mobilize Financial Services, a trading name of RCI Financial Services Limited (FRN: 312330), which is authorised and regulated by the Financial Conduct Authority.

Your Dacia Retailer is a credit broker and not a lender. Lenders will pay commission to your Dacia Retailer, rates may vary but will not influence the interest rate you pay. Speak to your Dacia Retailer for more information.

Contract Hire finance is provided, by Mobilize Lease & Co UK Limited (FRN: 1002137) (trading as Mobilize Lease&Co, which is an appointed representative of RCI Financial Services Limited (FRN: 312330). RCI Financial Services Limited is authorised and regulated by the Financial Conduct Authority.

Your Dacia dealer is a credit broker and not a lender. Mobilize Lease&Co will pay commission to your Dacia dealer, the amount will be fixed and will not influence the amount you pay under the Contract Hire Agreement. Speak to your Dacia dealer for more information.

Dacia UK will not receive a commission for any introduction to
your selected Dacia retailer/dealer. 

Steve is a leading UK automotive journalist, EV editor at The Independent, editor of Auto Express, Autocar and What Car?, and a global car awards judge and broadcaster.

More about Steve Fowler

This article is advertorial content reviewed by Dacia prior to publication.