Used Car Finance
The range of finance options available can be bewildering when looking for the best deal for your new vehicle.
Let the team at Premier Motors bust through the jargon and help you clearly understand the various options and which is the best fit for you.
Whether Hire Purchase, Personal Contract Purchase or Leasing is the best road for you to go down, you can be assured that our team of specialists will be able to help you easily understand the available options.
Personal Contract Purchase
Personal Contract Purchase (PCP) is an increasingly popular choice for car finance. It offers the best in flexibility at the end of the agreement, together with low, fixed monthly payments.
PCP is perfect if you are opting out of your company car scheme. Your company car allowance can fund your monthly payments, but there is no company car tax to pay.
At the beginning of the agreement, your car's guaranteed future value is calculated, based on an agreed mileage and age. This is deferred as a final 'balloon' payment.
○ Fixed regular payments
○ You have the option of ownership of the vehicle at the end of the agreement
○ Variable deposits and periods available, usually between 2 and 3 years
○ Once you have paid a half of the total amount payable you are able to exercise your legal rights and voluntary terminate the finance agreement by handing the vehicle back to the finance company (maybe subject to fair wear and tear)
○ Satisfactory quality rights under the Consumer Credit Act are provided, meaning the credit provider may be liable for putting things right providing the cash price was less than £30,000
○ The ability to repay additional amounts in-to the agreement and have the interest recalculated, meaning that you could lower your monthly repayment amount
○ A significant proportion of the credit is deferred until the end of the period which will need repaying should you decide to own the vehicle
○ The interest on the final payment is calculated differently to the body of the credit as no capital is reducing
○ The vehicles resale value may not be worth more than the final payment, meaning that your deposit may be reduced for your next vehicle. Therefore, you should be prepared for higher repayments
○ A ‘Fair Wear & Tear’ clause will apply if the vehicle is returned at the end of the agreement and may apply in the event of Voluntary Termination
○ You do not own the vehicle outright until the final payment is made
○ Your vehicle is at risk of repossession if you do not maintain the contractual repayments
○ Agreed mileage limits are imposed at inception
○ Excess mileage charges apply
○ You must maintain fully comprehensive insurance throughout the term of the agreement
○ You must not sub lease or rent the vehicle to a third party
○ There may be restrictions on usage of the vehicle during the term of the agreement
○ Charges may apply for late payments or to alter the repayment date (these are detailed in the SECCI)
○ Any outstanding finance must be settled if the goods are sold
Hire Purchase
If you choose to buy a vehicle under Hire Purchase (HP) you enter a contract where you would pay for the vehicle in parts. This is calculated by the value of the vehicle along with the interest added and divided into pre-determined amounts. It is different to a traditional loan, this is because you do not own the vehicle until the the loan has been paid off. The debt is secured against the vehicle, this means you are not allowed to sell it until the debt has been cleared.
This means you are borrowing money for the vehicle and the loan is secured against it. When you have paid all the finance owed, the car is yours.
Is it suitable for you? HP car finance would be a suitable option for you when you know you’ll be keeping the vehicle for a while.
○ Fixed regular payments
○ You are the ‘registered keeper’ of the vehicle with ownership of the vehicle transferred to you at the end of the agreement once the option to purchase fee has been paid (not applicable for Conditional Sale Agreement)
○ Variable deposits and periods available, usually in monthly increments from 12 to 60
○ Once you have paid a half of the total amount payable you are able to exercise your legal rights and voluntary terminate the finance agreement by handing the vehicle back to the finance company (may be subject to fair wear and tear)
○ Satisfactory quality rights under the Consumer Credit Act are provided, meaning the credit provider may be liable for putting things right providing the cash price was less than £30,000
○ The ability to repay additional amounts into agreement and have the interest recalculated, meaning that you could either lower your monthly repayment amount of shorten the term
○ A ‘Fair Wear & Tear’ clause may apply in the event of Voluntary Termination
○ You do not own the vehicle outright until the final payment is made
○ Your vehicle is at risk of repossession if you do not maintain the contractual repayments
○ You must maintain fully comprehensive insurance throughout the term of the agreement
○ You must not sub lease or rent the vehicle to a third party
○ Charges may apply for late payments or to alter the repayment date (these are detailed in the SECCI)