How to Finance a Subaru in the UK

Why People Finance a Subaru

Subaru holds a unique place in the UK automotive market. Renowned for reliability, all-wheel drive capability, and safety, models such as the Forester, Outback, and XV are popular with families and outdoor enthusiasts alike. With new Subarus typically ranging from £30,000–£45,000 and used models holding their value well, outright purchase may not be feasible for many buyers.

Financing a Subaru allows drivers to spread the cost, access newer models, and manage budgeting with predictability. Many Subaru buyers opt for Personal Contract Purchase (PCP) or Hire Purchase (HP) agreements, favouring fixed payments and flexibility at contract’s end. Leasing is also increasingly popular for those who prefer to drive a new car every few years without the commitment of ownership.

In short, financing puts a high-quality Subaru within reach, letting you enjoy the brand’s benefits with manageable monthly payments and options to suit your circumstances.

Your Car Finance Options Explained

Subaru buyers in the UK can choose from several main finance products:

PCP (Personal Contract Purchase)

• How it works: You pay a deposit (usually 10%), followed by monthly payments for 2–4 years. At the end, you can pay a balloon payment to own the car, return it, or part-exchange it for a new model.

• Pros: Lower monthly payments compared to HP; flexibility at the end of the term; often includes manufacturer incentives.

• Cons: You won’t own the car unless you pay the final balloon payment (often £8,000–£15,000 on a new Subaru); excess mileage and condition charges may apply.

• Example: A Subaru XV on PCP might cost £3,000 upfront, £325/month, with a £10,000 balloon.

HP (Hire Purchase)

• How it works: Pay a deposit and then fixed monthly payments until the full value is paid off. At the end, you own the car outright.

• Pros: Simpler structure; you own the car at the end; no balloon payment.

• Cons: Higher monthly payments than PCP; less flexibility if you want to change cars frequently.

• Example: The same Subaru XV may be £3,000 upfront, £450/month for four years, with no final payment.

Lease or PCH (Personal Contract Hire)

• How it works: Effectively a long-term rental. Pay a deposit and monthly rental for a set period, then return the car.

• Pros: Fixed costs; no worries about depreciation; road tax often included.

• Cons: No option to buy; subject to mileage limits and condition rules.

• Example: Lease a Subaru Outback from £400/month (plus deposit), hand back after 3 years.

Personal Loan

• How it works: Borrow a lump sum from a bank or broker, then buy the Subaru outright.

• Pros: Immediate ownership; flexible repayment terms.

• Cons: Requires good credit for best rates; car is at risk if you default.

Each option suits different needs. PCP is popular for those wanting flexibility and the latest model; HP is best for those set on ownership. Leasing appeals to drivers prioritising low hassle and fixed motoring costs.

How to Get the Best Deal on a Subaru

Securing the best Subaru car finance deals in the UK requires research and timing. Here are tried-and-tested strategies:

• Compare Lenders and Online Brokers: Don’t settle for dealer finance alone. Use online brokers like Kandoo to compare Subaru PCP offers, HP rates, and lease deals from a range of lenders. This often uncovers better APRs and incentives.

• Check Your Credit Score: Your score heavily influences interest rates. Check your file with Experian or Equifax before applying. If your score is low, consider taking steps to improve it—such as paying down debts or correcting errors.

• Negotiate Dealer Finance: Dealers may offer competitive rates, especially on new Subarus, but these aren’t always the best available. Use quotes from other lenders as leverage to negotiate better terms.

• Deposit Size Tips: A larger deposit (15–20%) can reduce monthly payments and overall interest. However, some lenders offer attractive deals with lower deposits for new Subarus.

• Timing is Key: Dealers often have end-of-quarter or plate-change targets. Shopping in March/September (new registrations) or at year-end can unlock extra discounts or 0% APR offers.

Pro Tip: Search phrases like “best Subaru car finance deals UK” or “compare Subaru PCP offers” to find current promotions and rates. Always review the total cost, not just the monthly payments.

Eligibility & Credit Check Tips

Lenders assess several factors before approving Subaru car finance:

• Income: Sufficient, stable income is essential. Lenders may want proof of employment or regular earnings.

• Affordability: Expect a review of your monthly outgoings to ensure repayments are manageable alongside your other commitments.

• Employment Status: Full-time employment is viewed favourably, but self-employed or contract workers can still qualify with extra documentation.

• Credit File: A clean credit history helps, but some lenders specialise in bad credit or thin-file applicants.

Even if you have bad credit, Kandoo can help match you with lenders who may still approve your application. Submitting a soft search through a broker won’t impact your credit score, offering reassurance as you explore your options.

Tip: Check your eligibility ahead of time with online calculators or soft search tools. Correct any errors on your credit file and avoid multiple hard searches in a short time.

Example Finance Scenarios

Let’s say you’re buying a 3-year-old Subaru Forester for £20,000. Here’s how PCP and HP could compare:

• PCP: Lower monthly payments, but you’ll need to pay the balloon (£9,000) to own the car, or return it.

• HP: Higher monthly payments, but you’ll own the Subaru outright at the end and pay less overall.

Leasing Example: Lease a new Subaru XV for £3,000 upfront, £370/month for 36 months. At the end, simply return the car with no further obligations.

These figures are approximate and subject to credit, lender, and vehicle specifics.

Common Questions About Subaru Finance

Can I get 0% APR on a Subaru? Manufacturers and some dealers occasionally offer 0% APR on new Subarus, especially at the end of the model year or during promotional events. However, these deals may require a larger deposit and have stricter eligibility criteria. Always compare with standard-rate finance to ensure it’s the best deal overall.

Is it cheaper to lease or finance? Leasing often results in lower monthly payments, but you never own the car. Financing (PCP or HP) may cost more per month, but offers a route to ownership and flexibility at contract’s end. Consider your priorities: fixed motoring costs and regular upgrades (lease), or eventual ownership (finance).

Can I get Subaru finance with bad credit? Yes. Specialist lenders and brokers like Kandoo can help applicants with less-than-perfect credit. While APRs may be higher, a range of options exist. Making a larger deposit and demonstrating stable income can improve your chances.

Can I refinance my current Subaru? If your circumstances or credit score have improved, refinancing your Subaru loan may lower your monthly payments or interest rate. Speak with your existing lender or use a broker to compare new offers.

How Kandoo Can Help

At Kandoo, we work with a panel of trusted UK lenders to help you find the best Subaru finance deals—quickly, securely, and with no impact on your credit score. Whether you’re interested in PCP, HP, or lease options, our service matches you with lenders most likely to approve your application, even if your credit history isn’t perfect.

Ready to get started? Compare Subaru finance deals now →