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If you’re wondering how to finance the purchase of your next car, then it’s worth looking at what our car dealership can offer.

car finance

Financing through a dealer can be fast and convenient, as the dealership takes care of all of the paperwork. You can even get your finance deal agreed on the same day.

A dealership allows you to take advantage of different finance products that give you the flexibility to adjust your monthly repayments and change your car more frequently if you wish.

Here we take a look at popular car financing options such as hire purchase and personal contract purchase.

 

 

What is Hire Purchase?

If you like to be able to budget accurately, then hire purchase could be a good finance product for you. It allows you to control your outgoings by giving you a set interest rate and fixed monthly payments.

You can easily adjust the deposit and length of your hire purchase agreement to enable you to fix the monthly payment that best suits your budget. And as the vehicle acts as security for the finance arrangement, all other forms of credit remain available to you for future use.

You can settle a hire purchase facility at any time – and at the end of the agreement, you take full ownership of the vehicle.

What is Personal Contract Purchase (PCP)

PCP is a finance product designed to reduce your monthly payments by delaying part of the repayment to the end of the agreement. Your monthly payments, deposit, annual mileage and final payment can all be adjusted to fit your needs.

As with a hire purchase agreement, you can settle your PCP at any time. The final payment can be referred to as a guaranteed minimum future value, a residual value or sometimes a balloon. This figure is calculated using industry data on the likely value of your vehicle at the end of the finance agreement.

The final payment amount is often adjusted downwards to aim to provide equity at the end of the agreement for your next purchase.

In a feature unique to PCP agreements, the final payment is guaranteed by the finance company meaning that if the real-world value of your vehicle declines faster than anticipated, you can simply return it to the finance company.

You’ll also have the option of paying off the future value to keep the vehicle or return it as a part exchange.

Because repayments on a PCP are normally lower than personal loans or hire purchase agreements, you can reduce the term of the contract or even consider a higher specification of vehicle for a similar monthly payment.

Would you like to talk to a car finance expert?

Foster & Heanes has a dedicated team of finance experts that can help you purchase your next vehicle.

We have relationships with both high street lenders and specialist motoring finance houses – which is how we’ve been able to help hundreds of customers to secure the best finance deal for their budget.

Even if you have a poor credit rating, our experts can help arrange finance for you.

Complete our 2-minute application

Use our online form to complete your application. Once submitted, we’ll get back to you as soon as possible.

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