Car stocking loans, explained.

What is unit stocking car finance?


Buying a car with unit stock finance

One aspect of the motor-industry that continues to do well is car finance and leasing.

This quick finance motoring guide outlines the different car finance types available to UK motorists with both good and bad credit history ratings.

Jump to:
What is a stocking loan, and can I still buy a car with unit stock finance?

Run a dealer stock finance check

Enter a registration number
(Example WP64LFD)

Reports include the business finance agreement number, finance type, company, and contact details

Lady checked unit stocking loan finance with CarVeto before buying her new car.

Understanding legal agreements before buying

Car finance agreements are legally binding, so find out loan terms like interest rates, the period of the loan, what happens if payments are missed and termination rights.

Stocking loan definitions (results from your CarVeto report)


This has nothing to do with taking out car finance.

Each CarVeto Platinum vehicle check provides detailed information from car finance checks. We let you know if there is any finance outstanding against the car, the lender, agreement type, agreement number and contact information.

Expect a CarVeto Warning status when there is money owing against the car. It includes Stocking Loans or Unit Stocking; a financial arrangement that allows dealerships to finance stock on their forecourt.

A unit stocking loan means that a finance company (such as Black Horse Motor Finance) own the car and allow the dealer to sell on their behalf. Once the car is sold from the forecourt, the car is settled by the dealer, who often reinvests the available cash into another vehicle.


Buying with caution

As with all car finance types, we encourage our customers to enquire with the lending company. This means getting in touch with them and asking the terms of the agreement and steps required to buy the car in a safe and legal manner.

CarVeto best practice:
Obtain a settlement letter stating the finance company has no further interest in the vehicle and that the dealer (or private seller if the loan is a Hire Purchase agreement) can sell the car in a law-abiding manner.

The different types of car finance

Personal Contract Purchase or PCP

More than 50% of new car sales are financed via PCP (according to the Finance and Leasing Association).

PCP involves paying an upfront deposit and agreeing fixed monthly payments.

PCP is a type of lease deal – you don’t own the car at the end of the term.

The bigger your deposit the less your monthly payments will be.

At the end of the contract, you can return the car to the dealers or make a final ‘balloon payment’ to buy the car outright. You can also use the car as a deposit towards a new deal.

PCP deals can include servicing, insurance and tyre cover.

PCP loans are secured against the car.

The loan type is more suited to those with an excellent credit history.


Hire Purchase or HP

The is a familiar term for more traditional car lending. You lay a deposit and spread the rest of the value of the car over a period of 12 to 60 months. At the end of the term, you own the car outright. The larger your deposit the lower your monthly payments. Also, in most circumstances, the shorter the loan period the less interest you pay as per APR (Annual Percentage Rates).

Hire Purchase loans are secured against the car.

The type of loan is good for those with excellent and poor credit history.


Personal loan

This type of loan is unsecured. You borrow from a third party lender like a high street bank and pay for the car outright. Your payments are made to the bank.

Personal loans make you a cash buyer and are useful when buying a car privately where other types of finance are not available.

Personal loans are not secured against the car.

This type of finance is typically available to those with good credit history unless you have an excellent relationship with your bank manager.

Check this link if you are considering an hpi check but wonder how it differs from a CarVeto data report.