Car finance: best new cars for less than £400 per month

  • Choose from seven-seat SUVs to sleek sports cars
  • Upmarket models can be surprisingly affordable
  • We've rounded up the best personal lease and PCP deals

Fancy an upmarket and lavishly equipped car? The £400 per month price range lands you right in the stomping ground of high-end manufactures like BMW, Audi, Mercedes, and Volvo. This sort of budget will stretch to hefty 4x4s, luxury saloons, and slinky sports cars, as well as pretty much any other type of car that takes your fancy.

This article lists the best PCP (personal contract purchase) and leasing deals around, helping you pick the right car for your needs.

With a PCP deal, you pay a deposit and a series of monthly payments. You then choose whether you want to buy the car at the end or not.

Leasing (sometimes referred to as PCH or Personal Contract Hire) is essentially the same as renting. You pay an initial payment, then a series of monthly payments. And that's it. You hand the car back.

PCP is the way to go if you want to keep your buying options open, and leasing is usually better if you don't want to buy a car at the end of the agreement.

Best new cars for under £400 a month 2020

LEASE: Volvo XC60

Best new car for £400 a month for: posh SUV looks

2019 blue Volvo XC60

The XC60 is the middle child of Volvo's SUV range, and brings a luxuriously lined interior similar to the one found in the larger XC90, into a smaller, cheaper, and easier to to park package.

As with any Volvo, it's packed to the rafters with safety kit, looks good, and importantly, it feels posh. Even 'entry' level Momentum spec gets an electric tailgate, cruise control, and an infotainment screen with Apple CarPlay and Android Auto.*

Leasing price: from £383 per month

LEASE: BMW i3

Best new car for £400 a month for: ground-breaking tech

BMW i3 side profile

The i3 was a ground-breaking small electric car when it first came out in 2013. Can you believe that shape is getting on for seven years old? Despite the i3's age, there are still very few posh and small electric vehicles on the market as competitors.

In short, it's a brilliantly capable electric car that adds a bit of dazzle to zero emissions driving. The interior is the main draw here - yes, it's rammed with tech you'd expect. But it looks other-worldly, and the dashboard is even made out of recycled material. Very green indeed.

Standard spec cars are the cheapest, but even S spec models, with a genuinely fast turn of pace (0-62mph in sub seven seconds) can be nabbed for sub £400.*

Leasing price: from £314 per month

*These deals are indicative examples of some packages available as of 21 February 2020 but are subject to change without prior notice. Everyone’s financial circumstances are different, and the availability of credit is subject to status. Terms, conditions and exclusions apply. Parkers cannot recommend a deal for you specifically. Bauer Consumer Media Limited is an appointed representative of ZenAuto Limited for the broking of regulated hire agreements. ZenAuto Limited is authorised and regulated by the Financial Conduct Authority. ZenAuto Limited's registered office is Number One, Great Exhibition Way, Kirkstall Forge, Leeds LS5 3BF. ZenAuto Limited's company registration number is 10967345. ZenAuto is the trading name of ZenAuto Limited. Terms, conditions and exclusions apply.


PCP: BMW 5 Series

Best new car for £400 a month for: upmarket saloons

Silver BMW 5 Series

The BMW 5 Series is the epitome of the premium executive saloon class. Now in its seventh generation, it has quietly improved itself through every iteration, culminating in this.

While the interior lacks the wow factor of the Mercedes-Benz E-Class, it makes up for it in the way it drives. It feels so much more agile than similarly large cars.

The 2.0-litre diesel engine found in this model is a peach too. Powerful enough to keep up in the outside lane, but also capable of 52.3mpg.**

BMW 520d M Sport Saloon

  • Monthly cost: £359 (47 payments)
  • Deposit: £5,439 (including deposit contribution of £8,097.14)
  • Total amount payable by customer to buy car: £45,511.29
  • Cash price: £42,140
  • Mileage allowance: 10,000 miles per year
  • APR: 3.9%

BMW 5 Series PCP deal

PCP: Alpine A110

Best new car under £400 a month for: sportscar thrills

Blue Alpine A110

The sensation of an almost total lack of mass, engaging handling, and rally-car aping noise earned the Alpine A110 our Best Car For Thrill-Seekers award for 2020.

And just look at it. It's a pastiche of the original A110's silhouette, but this application makes it look more taut and powerful.

The long and the short of it is that you can drive the best sports cars around for less than £400 per month.**

Alpine A110 Pure

  • Monthly cost: £399 (49 payments)
  • Deposit: £8,909
  • Total amount payable by customer to buy car: £54,205
  • Cash price: £47,810
  • Mileage allowance: 10,000 miles per year
  • APR: 4.9%

Alpine A110 PCP deal

PCP: Audi A5 Cabriolet

Best new car under £400 a month for: top down fun

Blue 2018 Audi A5 Cabriolet

A two-door, stylish, well-made convertible, with just the right wow factor for sub £400 per month? Your eyes aren't deceiving you.

It'll seat four in relative comfort, while there's a surprising amount of room for luggage too. And if you're going to be in full-view of the world with the roof down, the interior needs to be pretty special. The A5 doesn't disappoint. Its slick design and top-notch materials are lifted straight out of the Audi A4 saloon and it's all the better for it.**

Audi A5 S Line 40 TFSI Manual

  • Monthly cost: £399 (47 payments)
  • Deposit: £6,363.99 (including £5,250 deposit contribution)
  • Total amount payable by customer to buy car: £38,342.44
  • Cash price: £41,165
  • Mileage allowance: 10,000 miles per year
  • APR: 2.9%

Audi A5 Cabriolet PCP deal

PCP: Cupra Ateca

Best new car under £400 a month for: performance SUVs

2019 white Cupra Ateca

This isn't a Seat. No siree Bob. It is in fact, a Cupra. You might not have seen the name that much, but it's essentially a sporting offshoot from Seat. And the Ateca is the first car from Cupra since becoming a brand in its own right.

The Cupra Ateca is essentially then, a Seat Ateca with a 300hp 2.0-litre turbocharged engine sending power to all four-wheels via an all-wheel drive system. For such a tall car, it handles with purpose and poise.

What you're getting here is a mini Porsche Cayenne for just a little under £400 per month.**

Cupra Ateca 2.0 TSI

  • Monthly cost: £398.22 (48 payments)
  • Deposit: £3,609.50 (including £1,750 deposit contribution)
  • Total amount payable by customer to buy car: £40,632.34
  • Cash price: £36,095
  • Mileage allowance: 10,000 miles per year
  • APR: 4.9%

Cupra Ateca PCP deal

PCP: Volkswagen Touareg

Best new car under £400 a month for: girthy SUVs

2020 Parkers new car awards best tow car Volkswagen Touareg

Just a shred under £400 a month might seem like a lot of money to spend on a Volkswagen. But it is the marque's most expensive car, and it shares underpinnings with much more expensive meta like the Audi Q7 and Bentley Bentayga.

It's big and posh then. And it can also tow loads - up to 3,500kg to be precise. Plus it has modern tech like trailer assist. It even won our Best Tow Car of the Year award for 2020. 0% APR for a car of this price is pretty generous too.**

Volkswagen Touareg SEL 3.0 TDI

  • Monthly cost: £399 (47 payments)
  • Deposit: £9,190.40 (including £3,500 manufacturer deposit contribution)
  • Total amount payable by customer to buy car: £49,645
  • Cash price: £49,645
  • Mileage allowance: 10,000 miles per year
  • APR: 0%

Volkswagen Touareg PCP deal

What to read next - car finance

Looking to learn more about car finance? Watch our video guides to PCP financePCH leasing and Hire Purchase, or visit our car finance calculator to find out how much you can afford to borrow.

** These deals are indicative examples of some packages available as at 21 February 2020, but are subject to change without prior notice. Everyone's financial circumstances are different and the availability of credit is subject to status. Terms, conditions and exclusions apply. Parkers cannot recommend a deal for you specifically.

Bauer Consumer Media Limited is an appointed representative of ZenAuto Limited for the broking of regulated consumer hire agreements. ZenAuto Limited is authorised and regulated by the Financial Conduct Authority. ZenAuto Limited's registered office is Number One, Great Exhibition Way, Kirkstall Forge, Leeds LS5 3BF. ZenAuto Limited's company registration number is 10967345. ZenAuto is the trading name of ZenAuto Limited.