How Does Financing a Car Work?

Types of Car Finance

Personal Motor Loan (PML)

A Personal Motor Loan (PML) is a traditional finance method where you pay fixed monthly repayments over a set term. PML gives you the option to reduce the monthly cost with an initial deposit or by trading in your current car.

With a fixed interest rate, you’ll know exactly how much you’ll repay from the start of the agreement. You will own the vehicle only once all monthly repayments have been made. Find more information about PML finance deals available now with Kia.

Personal Contract Purchase (PCP)

Personal Contract Purchase (PCP) is a way of financing a car through an initial deposit amount of your choice, followed by monthly payments over an agreed term.

At the end of a PCP contract, you will have three options: to return, renew or buy. You have the choice to buy the car with an optional final payment. You can also renew your deal using any equity you’ve built during the contract towards a deposit for an upgraded car.

If you decide to simply return the car, excess mileage charges may apply if you have exceeded the limit set out at the beginning of the contract. When it comes to PCP vs Lease , PCP provides much greater flexibility when structuring your contract and throughout.

For more information, or to discover the extensive range of Kia cars available with PCP, visit our dedicated PCP finance page.

Personal Contract Hire (PCH)

Personal Contract Hire (PCH) is only offered by Kia to private individuals (e.g. sole traders). It’s a popular way to lease a car for private individuals who do not wish to own the vehicle. This is because PCH doesn’t grant you the option of ownership .

In a PCH agreement, you pay an upfront advance rental fee followed by fixed monthly rental payments during the contract, until you hand it back at the end of the lease. PCH contracts usually have mileage limitations that, if exceeded, will prompt an excess mileage charge.

Learn more about PCH car lease deals with Kia.

What checks are done for car finance?

The checks for car finance usually include:
• Proof of identity
• Proof of address
• Driver’s licence
• Proof of income
• Employment
• Credit check

Can I sell my car with outstanding finance?

No, it is illegal to sell a car with outstanding finance because you don't legally own it. Once you’ve paid off your lease you can sell the car as and when you please.

If you wish to pay off your car finance early, some options will allow you to do this. At Kia, we allow you to settle both PML and PCP agreements early by paying the remaining balance in the contract. With PCP car deals, you can also terminate your contract early once you’ve paid 50% of the loan amount, although this may incur an additional fee.

Can you modify a financed car?

If you have fully repaid your finance plan and legally own the car, you can modify it.

However, if you’re still paying, the lender or dealership still legally owns the car and must therefore approve any modifications you want to make. Usually, your car finance lender will want the car returned in its original condition, so modifying it will be forbidden. In certain cases, it may be approved, so it’s always best to consult your lender directly.

Is financing a car a good idea?

Car financing can be a practical way to fund a car purchase without paying the upfront cost. However, understanding the details of available finance options will help you find the right solution.

At Kia, we like to keep car financing simple. With our tailorable finance services, your plan is personalised to suit your needs, always with no arrangement or purchase fees. Discover our exciting range of Kia cars available on PCP, PML and contract hire finance, including Hybrid, Plug-In Hybrid and pure Electric cars.