Determining the most cost-effective way to finance a car depends on various factors, such as the type of loan, its duration, and the annual percentage rate (APR). It’s essential to note that the loan with the lowest monthly repayment may not necessarily be the most economical option, as you could end up paying more in interest over the loan term. PCP car finance might emerge as the most economical choice for you. Unlike HP and personal loans, PCP doesn’t require you to borrow the entire vehicle’s value. Instead, you borrow the disparity between the current price and the lender’s projected value of the car at the end of your agreement, known as the Guaranteed Minimum Future Value (GMFV). However, keep in mind that you won’t own the car at the end of your loan unless you opt to pay the balloon payment.