Getting an electric car might be one of the most intelligent decisions you can take, both from an environmental perspective and a financial one. Regardless of whether you are considering buying a brand new car or a used but quality vehicle, knowing how to finance it correctly can mean the world. Electric vehicle finance can be described as a way that opens the door to affordable electric cars for thousands of people throughout the UK. You will find many ways for electric car finance that match your budget without making any guesswork.
Here at Car Loan First, you have access to a variety of lenders, a fast and easy 2-min application that does not harm your credit score, and personalised finance offers for you. Whatever you may need, HP, PCP or bad credit car finance for your future EV, Car Loan First provides all of that to you and much more.
What Finance Options Do You Have for an Electric Car in the UK?
As far as electric car finance goes, there are basically two products available for UK customers: Hire Purchase (HP) and Personal Contract Purchase (PCP).
Under the HP scheme, you pay off the total cost of the car in fixed monthly payments, and after the period of the agreement is over, you have the electric vehicle ownership. There are no restrictions on mileage, and there is no balloon payment; HP is one of the easiest ways to purchase an electric car.
The PCP is different from HP; in this case, you do not pay the total cost of the EV monthly payments, but just the amount of depreciation, which leads to reduced monthly payments. At the end of the agreement, you either return the car, keep it for additional money, or trade it in for a new one. PCP is particularly suitable for those people who like to change their cars every couple of years.
Both schemes work fine for battery-electric vehicles, but you should still choose wisely, based on how long you want to keep the car.
Is Used Vehicle Finance for Electric Cars More Cost-Effective Than New?
Absolutely, here’s where you’ll see where the clever shopper gets their money’s worth. Used electric car finance has become very popular in recent years due to the rise of battery electric cars coming off lease into the second-hand market. Secondhand EVs cost less and therefore lower the total amount that needs financing, as well as lowering your EV monthly payments.
Used electric car finance also helps to alleviate rapid depreciation, which affects new EVs more in their early days. Some benefits of getting a used EV on finance include:
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- Lower price is equal to cheaper EV monthly payments
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- Less depreciation risk than getting new
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- Same financial options available as with new (HP and PCP)
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- Many used EVs will still be under warranty by the manufacturer
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- Wide selection of different price ranges
If keeping your budget in check is one of your priorities, an affordable EV on HP or PCP will give you the environmentally-friendly driving experience.
What Grants and Incentives Can Help to Lower Your Electric Vehicle Ownership Costs?
The UK Government has invested heavily in supporting the EV transition, and learning about these incentives can help to lower your electric vehicle ownership costs significantly.
Probably the most important is the Plug-in Van Grant that continues to operate for eligible commercial electric vehicles. The former Plug-in Car Grant that was available for cars ceased its operations in 2022, but there are still other electric vehicle grants in the UK. One of the grants is the EV Chargepoint Grant that helps cover up to 75 per cent of the cost of installing home chargers.
In addition to grants, owning an electric vehicle will cost less in terms of everyday expenses. Owners of new zero-emission cars registered before April 2025 have to pay nothing for the VED. What is more, their cars cost less to refuel than petrol or diesel cars, and servicing bills are lower.
How Do You Find the Best Car Finance Providers in the UK for an EV?
Not all finance providers regard electric cars equally, and it’s vital to compare them. The best electric car finance deals will be obtained by working with a broker who can access the largest possible panel of lenders compared to dealing with just one lender or dealership directly. The broker will look into many options for you and will offer the best deal based on your credit score, whether it’s great, average, or needs improving.
Here’s what to compare when considering car finance providers in the UK:
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- Representative APR and the total amount repayable
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- The flexibility of the agreement (can you make early settlements?)
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- Do you need to make a down payment or not?
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- Mileage allowance (only for PCP)
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- Lender attitude to electric cars and batteries
To know the best electric car finance deals that the market offers, you need transparency, which is what a good broker provides you with. Car Loan First cooperates with reputable UK lenders and makes sure you are aware of the exact terms, no extra charges, no hidden fees.
Get Finance with Car Loan First for Your EV
Going electric is an excellent choice, but getting the finances to do it right now rather than always postponing makes all the difference. Finance for electric cars, which is fast, flexible, and fair, is precisely what Car Loan First offers.
Whether new or used electric car finance, the affordability of electric cars is the essence of what Car Loan First does. The application process is quick, works for all credit scores, and leaves no footprint on your credit score. You can even get rates starting at 9% APR, and they have a dedicated team that walks you through every step along the way.
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Frequently Asked Questions
Am I eligible for electric car finance with a poor credit score?
Yes, there are a few specialist lenders that lend to people who have encountered some credit troubles. Through a broker such as Car Loan First, lenders will be searched through an entire panel of providers, even those that take into account bad credit loan applications, so your likelihood of acceptance is much higher than if you were to apply directly to one lender.
Will the type of battery affect my application?
For the most part, no, conventional finance providers base their decisions on the eligibility of the applicant rather than the state of the battery in the vehicle. But it might be wise to check the battery of a pre-owned EV before purchase, as this can impact its resale value.
Which financing option should I go for, PCP or HP?
It all depends on your personal needs since the HP finance option would benefit a client who wants total ownership of the car without any limitations at all, while PCP would be more suitable for clients who want cheap monthly payments.
Are EV grants available in the UK for financing purposes aside from cash-paying clients?
Yes, the EV Chargepoint Grant is available whether you buy your vehicle with cash or finance. Choosing the best car finance brokers uk can help you secure a competitive finance deal while remaining eligible for the grant, subject to the scheme’s requirements.
What will happen to my finance arrangement if I decide to sell my EV before the end of its period?
If you use HP, you can do an early settlement whereby you ask the lender for an early settlement quote and clear it. On the other hand, you can still do an early settlement using PCP even though it may be slightly difficult because of balloon payment options.
