Is the lowest monthly car-finance payment always the cheapest deal?

No. A low monthly figure can hide a longer term, larger deposit, high interest or a large balloon payment. Compare the total amount payable and end-of-contract position.

In relation to “Is the lowest monthly car-finance payment always the cheapest deal?”, pCP and hire purchase are credit agreements, so the useful numbers are not only the monthly payment but also total payable, settlement and any end-of-contract amount.

For “Is the lowest monthly car-finance payment always the cheapest deal?”, compare total amount payable, deposit, term and any final payment as well as APR. Two deals with similar monthly payments can have very different total costs.

For “Is the lowest monthly car-finance payment always the cheapest deal?”, this answer is written for a Northern Ireland user, but some vehicle-registration, consumer-credit and insurance functions operate on a UK-wide basis. The attached sources — MoneyHelper - Personal Contract Purchase (PCP), MoneyHelper - Buying a car with Hire Purchase, and nidirect - Contact Consumerline — are therefore deliberately mixed where the responsible authority is UK-wide. That is more accurate than forcing every point into an NI-only source.

Practical next step for “Is the lowest monthly car-finance payment always the cheapest deal?”: open the finance agreement and find the figures or clause relevant to this question. If you are changing or ending the agreement, request the current position directly from the finance provider before promising the car to anyone else.