If you return the car at the end of the agreement, you'll be charged for any damage or excess mileage.Interest on the final balloon payment is included in the monthly payments, whether you want the car at the end or not.If you decide to keep the car, the final lump sum payment can be expensive.As there is a large lump sum payment at the end of the deal, monthly payments are usually lower than HP agreements.You can choose whether to keep the car at the end of the agreement.You may also be able to refinance it with a new PCP deal. Like hire purchase agreements, you may have to pay for servicing and general upkeep unless the dealer includes it as part of the package, so be aware of this when negotiating a deal.Īt the end of the PCP period you have the choice to either return the vehicle or purchase it outright by paying a lump sum (also known as a balloon payment), which will have been agreed at the start of the deal based on the minimum future value the dealer believes it will be worth. As your loan is secured against the car, it could be repossessed if you miss paymentsĪ personal contract purchase (PCP) agreement typically involves paying a deposit followed by monthly instalments over a fixed period - these payments will vary based on the pre-agreed mileage limit.You do not own the car until your last payment.Monthly payments can be higher than other finance options.As you will eventually own the car, you needn't worry about predetermined mileage restrictions or what condition the car is in at the end of the agreement.Payments will usually be a fixed amount over a time period agreed upon from the start.After your final payment, the car is yours to keep.This means you'll usually need to cover servicing and car insurance costs - these costs are sometimes included in the agreement, so it's worth checking before you sign. While the finance company remains the legal owner during the HP agreement, you’re recorded as the registered keeper. You eventually gain ownership of the car, but only after your final payment. With a hire purchase (HP) agreement, you’re hiring a car directly from a lender - paying an initial deposit and then making monthly payments for the cost of the vehicle. Here, we explain the main finance options along with key information to help you decide what’s best for you. With so many options, car finance can seem complex. We look at all the options available to help you make the best decision for your needs and financial circumstances.ĭealership or broker? Get the best deal by reading our guide on where to buy a car What are the different car finance options? There are also other ways to pay for your car that could be cheaper than dealer finance and suit you better, such as credit cards or personal loans. In this guide, we explain the different types of finance plan available - including hire purchase, personal contract purchase and leasing - revealing the pros and cons for each. When you’re buying a car from a dealer or broker, it’s likely you’ll be offered a finance scheme - a package that sees you pay off a car in fixed instalments.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |