Personal loans
The most popular way of paying for a new car, with a huge variety of lenders offering personal loans - so shop around for the best deals. You choose how long you take to repay the loan and there are no restrictions on the type of car you buy or how many miles you cover - you also don't need a hefty deposit up front.

The car will also be yours from day one, but if you take out a secured loan, bear in mind you could lose your home if you don't keep up repayments - and lenders are very choosy.

Hire purchase
This involves handing over a deposit, then paying off the balance in monthly instalments over an agreed period of time. Most dealers offer HP schemes, but interest rates vary, so check out the APR to tell you the real cost of borrowing.

The monthly payments may be higher than with some other finance methods, but the overall sum paid back is generally lower.An HP loan is secured on the car, so you won't be evicted from your house, and you own the car outright when you hand over the final payment.

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