Car finance types: five agreement shapes, and the firms that write them
Almost every way of paying monthly for a car is one of five agreements, and almost every firm involved is one of three kinds. Which agreement you have decides your statutory rights. Which firm you are dealing with decides who is responsible when something goes wrong.
- of the Regulated Activities Order 2001 defines credit broking
- art.36A
- gives voluntary termination on regulated credit, never on consumer hire
- s.99
- blocks repossession without a court order once a third is paid
- s.90
Figures on this page are the statutory rights that attach to a regulated motor finance agreement in Great Britain, quoted from the legislation itself and linked in the sources below. KnownVehicle is not authorised for credit broking and introduces no lender: nothing here is a quote, an application or a recommendation.
- 2 vendor product pages verifiedevery figure matched verbatim to the vendor's page
- Quoted and dated, never estimatedlast verification pass 2026-08-26
- 2 check types coveredeach with measured search demand behind it
Lenders for car loans, and the shapes and firms behind them
- Hire purchase, conditional sale and PCP are credit. Hire purchase repays the whole price and title passes at the final payment. Conditional sale is its near identical sibling, differing mainly in when title passes. PCP defers part of the price to a guaranteed minimum future value you may pay to own the car. All three are regulated credit, so s.66A withdrawal, s.94 early settlement, s.90 protected goods and s.99 voluntary termination attach to them, and the lender owns the car until the end.
- Contract hire and personal loans are the other two. Contract hire is a lease: fixed term, fixed mileage, no option to buy, and the credit rights do not attach because it is hire rather than credit. An unsecured personal loan is not motor finance at all; you buy the car outright with borrowed money and own it from day one, which means you can sell it whenever you like and the lender has no claim on the vehicle. Those two sit at opposite ends of ownership.
- Lender, broker and dealer are different roles. The lender writes the agreement and is the party you owe. A broker introduces you to lenders and is carrying on credit broking, a regulated activity under art.36A of the Regulated Activities Order. A dealer selling the car is usually also acting as a broker when it arranges the finance, and on hire purchase it sells the car to the lender rather than to you. That is why a quality complaint goes to the finance house and an introduction complaint goes to the broker.
- Check any of them before you commit. Every firm arranging or providing regulated consumer credit must be authorised, and its permissions are public on the FCA's Financial Services Register. Search the firm's name, confirm it holds credit broking or lending permission, and check the trading names listed against it, because brokers commonly operate under several. A firm that cannot be found on the register should not be arranging regulated credit for you.
Common questions
- Different car finance options: what are the main types of car finance?
- Hire purchase, conditional sale and PCP are regulated credit. Contract hire is a lease. An unsecured personal loan buys the car outright. The first three carry the Consumer Credit Act rights.
- Car dealer finance: what does car on finance actually mean?
- Usually that a lender owns the vehicle and you are paying for the right to use it with title passing at the end, which is what hire purchase and PCP do.
- Car finance dealerships, lenders and brokers: what is the difference?
- The lender writes the agreement and is who you owe. A broker introduces you to lenders, which is credit broking, a regulated activity under art.36A.
- How do I check PCP brokers and PCP finance providers?
- Search the firm on the FCA's Financial Services Register, confirm the permission and check its registered trading names.
- Are PCP loans really loans?
- It is a regulated credit agreement of the hire purchase family, not an unsecured loan. The lender owns the car until the option to purchase is exercised.
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Sources
Cite or embed this figure
The median advertised price of a single full car check in the GB car check market was £14.99 in August 2026, across 2 verified vendor product pages recorded in KnownVehicle Car Check Price Index.
Cite as: "KnownVehicle Car Check Price Index", updated 2026-08-26, https://knownvehicle.com/finance/car-finance-types/.