Finance Options Explained

How does it work?

Personal Contract Hire is a fixed-cost, rental agreement. You choose a new vehicle, agree the maximum annual mileage and length of agreement, and then pay an initial rental followed by fixed monthly rentals to suit your budget. You can even choose to cover vehicle maintenance costs as part of your agreement subject to paying a maintenance charge which is added to your monthly rental.

  1. Choose from an advance rental of 1 – 21 months giving flexibility to set your monthly rentals to suit your budget.
  2. Contract term between 2 – 5 years
  3. Agreed Annual Mileage 1) If you drive less than the agreed annual mileage this will not alter the monthly rentals.
                                                2) If you exceed the agreed annual mileage, excess mileage charges will apply.
  4. At the end of the contract, you must return the vehicle and will have nothing further to pay provided the vehicle is in good condition and has not exceeded the agreed mileage. If the vehicle does not meet the mileage and condition terms, excess charges may apply.

The benefits

  • Hassle Free Motoring - Road tax is included and no disposal worries just return the car at the end, subject to vehicle condition and mileage. Excess charges will apply if the vehicle is returned outside of the condition and mileage terms
  • Fixed monthly rentals to suit your budget.
  • Choice of mileage, advance rental and length of agreement at start of contract.
  • Optional maintenance package. Subject to a maintenance charge
  • You can terminate the contract early by paying 50% of the remaining rental cost.
  • The higher advance rental you pay the lower your normal monthly rental will be.

However, the following must also be considered.

  • You cannot buy the vehicle at the end of the contract.
  • You must maintain the vehicle in accordance with the contract even if you have not chosen the optional maintenance package.
  • Failure to maintain contractual rentals may result in legal action.

How does it work?

With Personal Contract Purchase you can keep your monthly payments lower by deferring a significant proportion of the amount of credit to the final payment at the end of the agreement. Agree an initial deposit, how many miles you are likely to travel each year and how long you want the agreement to run for and the dealer will then calculate the Guaranteed Future Value (GFV) of your vehicle and confirm your monthly payment. We will submit the finance application to the finance company and subject to your application being approved; you can just drive your car away.

The options at the end of the agreement are:

  • Part exchange the vehicle subject to settlement of your existing finance agreement; new finance agreements are subject to status.
  • Return the vehicle and not pay the Final Lump Sum Payment. If the vehicle is in good condition and has not exceeded the allowed mileage you will have nothing further to pay. If the vehicle has exceeded the allowed mileage a charge for excess mileage will apply.
  • Pay the Final Lump Sum Payment to own the vehicle.

The benefits

  • Flexibility - Set payment periods from two to four years, then take the best option for you when you reach the end
  • Ideal if you: You like to drive the newest model
                           You like to keep your options open
                           You like to budget
  • Lower payments means you might be able to afford a newer car.
  • Newer model means lower maintenance costs

How does it work?

Hire Purchase could help you buy your dream car while spreading the cost. Agree an initial deposit with us and your agreement term and monthly repayment amount then we will submit the finance application to us and subject to your application being approved, you can just drive it away – and after you’ve made all the repayments including the interest the car’s all yours.

The benefits

  • You want to own your car outright at the end of your agreement.
  • You like to budget and know the exact repayment amount each month.
  • Choose any new or used car up to ten years old.
  • Fixed regular repayments, giving you peace of mind.

However, the following must also be considered.

  • You have no protection against depreciation as a result of an unexpected fall in the value  of the vehicle.
  • You do not own the vehicle until the final repayment  has been made.
  • Your vehicle is at risk of repossession if you do not maintain contractual repayments.
  • You must have fully  comprehensive insurance

How does it work?

Lease Purchase is similar to a Personal Contract Purchase (PCP) - you can keep your monthly payments lower by deferring a significant proportion of the amount of credit to the final payment at the end of the agreement but do not have the option to return the vehicle to the Finance company at the end of the agreement.

Agree an initial deposit and how long you want the agreement to run for and the dealer will then calculate your final payment and confirm your regular monthly payment. The dealer will submit the finance application to us and subject to your application being approved, you can just drive your car away.

The options are:
(1) pay the Final Lump Sum Payment to own the vehicle or
(2) part exchange the vehicle subject to settlement of your existing
finance agreement; new finance agreements are subject to status.

Lease Purchase is often used by customers and limited companies who don’t want to be bound by mileage restrictions. Lease purchase is only available to limited companies on a non regulated basis.

The benefits

  • You like to drive the newest model.
  • You want to keep your monthly payments lower.
  • You don’t want to be subject to excess mileage clauses.
  • No Mileage Restrictions.
  • Lower payments means you might be able to afford a newer car

However, the following must also be considered.

  • A significant proportion of the credit is deferred until the end of the contract so you should prepare for this.
  • Your vehicle is at risk of repossession if you do not maintain contractual repayments.
  • You do not own the vehicle until the final payment including interest has been made.

How does it work?

Business Contract Hire  is a fixed-cost, rental agreement.  You choose a new vehicle, agree the maximum annual mileage and length of agreement, and then pay an initial rental followed by fixed monthly rentals to suit your budget. You can even choose to cover vehicle maintenance costs as part of your agreement subject to paying a maintenance charge which is added to your monthly rental.

  • Choose from an advance rental  of 1 – 12 months giving flexibility to set your monthly rentals to suit your budget.
  • Contract term between 2 – 5 years.
  • Agreed Annual Mileage
    1) If you drive less than the agreed
    annual mileage this will not alter the monthly rentals.
    2) If you exceed the agreed annual mileage, excess mileage charges
    will apply.
  • At the end of the contract, you must return the vehicle and will have nothing further to pay provided the vehicle is in good condition and has not exceeded the agreed mileage.  If the vehicle does not meet the mileage and condition terms, excess charges may apply.

The benefits

  • Low initial outlay and regular rentals for easy budgeting.
  • Road Fund License included for the duration of your contract.
  • Optional servicing, maintenance and repair packages bring all your running costs together in a single rental.
  • No concerns over the future value of your vehicle.
  • You don't have the worry of selling your vehicle at the end of your contract.

However, the following must also be considered.

  • You cannot buy the vehicle at the end of the contract.
  • You must maintain the vehicle in accordance with the contract even if you have not chosen the optional maintenance package.
  • Failure to maintain contractual rentals may result in legal action.

This is a brief outline of the most common forms of finance, but as individual needs vary greatly, advice should be taken from your own accountant to ascertain suitability.

If you would like any quotes or have any other queries, please do not hesitate to contact us on 028 677 21354.

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