Manufacturer Finance Car Finance: How It Works, Rates & Alternatives

What is manufacturer finance?

Manufacturer finance is finance branded by a carmaker and offered on its own vehicles, run by the brand's financial-services company or a partner lender. It's sometimes called "captive" finance.

Whether the brand lends itself or a third party funds it behind the scenes, the agreement is with an FCA-authorised finance provider that must run an affordability check. The car brand's name on the paperwork doesn't change your legal rights.

What products does manufacturer finance offer?

Manufacturer schemes typically offer PCP and Hire Purchase (HP), often with deposit contributions or low headline rates on new cars.

• PCP: the most common manufacturer deal — a lower monthly with an optional final balloon, see the PCP calculator.
• Hire Purchase (HP): pay off the whole price and own the car, see the HP calculator.
• Incentives: deposit contributions, low or 0% rates, or servicing bundles on selected models.

What rates and eligibility apply?

Manufacturer headline rates can look low — even 0% — but they apply to selected models and stronger credit profiles, and the APR you're offered is set after a credit and affordability check.

A 0% or low-rate deal isn't automatically the cheapest: a cash discount you give up to take the finance can outweigh the interest you save. Compare a 0% deal against a cash discount, and turn any offer into its real cost with our APR calculator.

How manufacturer finance compares — your alternatives

Manufacturer finance is convenient at the dealer, but a direct lender, broker or personal loan can sometimes work out cheaper overall.

Always compare on the total amount payable on the main calculator — including any cash discount you'd give up — not the monthly or the headline rate.