Car loan, PCP/leasing (LOA) or long-term leasing (LLD): which financing to choose in 2026?
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Understanding financing options
Cash purchase
You pay for the car in one go, with no monthly payments or interest. It is the simplest option and often the least expensive overall, provided you have the savings available. On the other hand, it ties up a significant amount of cash. Best suited for those who want to own the car immediately and avoid any financing costs.
Car loan
You buy the car immediately and repay in monthly instalments over a fixed period, with interest. The final cost depends mainly on the rate, term and any down payment. The longer the loan, the lower the monthly payment, but the higher the total cost. A good option if you want to spread the expense while remaining the owner.
See FAQ: Car loanPCP/Leasing (LOA)
You lease the car for a set period, often with a higher initial payment, followed by fixed monthly payments. The contract usually includes a mileage allowance. At the end, you can return the vehicle or buy it by exercising the purchase option. Attractive if you like changing cars regularly, but the total cost deserves careful scrutiny.
See FAQ: Loan, PCP/leasing (LOA) or long-term leasing (LLD)?Long-term leasing (LLD)
You pay a monthly rental to use the car for a set period, with no option to own it at the end in most cases. Some contracts include services such as maintenance, roadside assistance or servicing. It offers a clear and predictable budget, but you build no equity in the vehicle.
See glossary: Long-term leasing (LLD)