What a bad finance deal looks like

The number a dealer wants you to look at is the monthly payment. The number that tells you whether the deal is any good is the total amount payable, which is on every finance illustration by law, usually in smaller print. Here are the six ways a "£199 a month, mate" deal quietly becomes the most expensive way to buy that car.

1. The stretched term

Any monthly can be made to look affordable if the term is long enough. £8,000 over 60 months instead of 36 knocks maybe £80 off the monthly, and adds hundreds, sometimes over a thousand, in extra interest. Longer term = more months paying interest. Always compare deals on total payable, at the same term.

2. The balloon you didn't clock

On PCP, the low monthly exists because a chunk of the car's price is parked at the end as the balloon payment. If nobody's clearly told you what that final figure is, ask. It's often £4,000–£8,000. "I'll worry about it in four years" is how people end up with no car and no savings in four years.

3. Negative equity rolled into the next deal

If you trade in a financed car that's worth less than you still owe, some dealers will "helpfully" add the shortfall to your new agreement. You're now paying interest on a car you no longer own. If a dealer says "don't worry about the settlement figure, we'll sort it", that's exactly the figure to worry about.

4. The rate that moved between the advert and the paperwork

Representative APR means at least 51% of accepted customers get that rate. You might not be one of them. That's legal and normal. What's a red flag is the rate never being clearly stated until you're sat with the paperwork. Ask for the APR and total payable in writing before you're in the "signing room".

5. Add-ons stuffed into the finance

Paint protection, GAP insurance, wheel insurance, admin fees. All financed, all accruing interest for 4–5 years. Some of these products have legitimate versions sold separately for far less. Anything added to the agreement should survive the question: "would I buy this with cash at that price?"

6. Pressure to sign today

"This rate is only available today" is almost never true. Finance quotes hold. A deal that can't survive you sleeping on it is not a deal.

Worth knowing: the commission rules changed

Dealers historically could earn more commission by putting you on a higher rate. That practice was banned by the FCA in 2021, and mis-sold agreements from before then have been the subject of a major industry redress process. The takeaway for you today: the dealer's finance offer is still a product they're paid to sell. Compare it against at least one direct lender or broker quote before saying yes.