Finance Explained
Understand your buying options
We act as a credit broker, not a lender, and will introduce you to one of our finance options
Personal Contract Purchase (PCP)
Personal Contract Purchase, usually known as PCP, is a very popular way to purchase a car that has some great benefits. It defers some of the vehicle cost until the end of the finance agreement. The deferred amount is known as the Guaranteed Minimum Future Value (GMFV) or sometimes as the Optional Final Payment. Interest on this deferred amount is included in the monthly payments that you are quoted.
You have the flexibility to choose the amount of deposit and the term of the agreement and as this is a fixed interest loan the payments will not change during the agreement.
You agree an annual mileage as part of this agreement and it is important that this is accurate. If you exceed the agreed mileage, and choose to hand your car back at the end of the agreement, then excess mileage charges will apply. Your car must also be in fair condition for its age and mileage. Your vehicle is at risk of repossession if you do not maintain the contractual repayments. We receive a commission from the Finance Lender if you take out a finance agreement.
*At the end of the agreement you have three choices:
- 1. Pay the GMFV in order to own the car;
- 2. Hand the car back.
- 3. Use any value above the GMFV as a deposit against another car.
- There is no guarantee that there will be any value above the GMFV.
Hire Purchase (HP)
Hire Purchase is a way to buy a vehicle with the flexibility to choose the amount of deposit and the term of the agreement. As this is a fixed interest agreement the monthly payments will not change during the agreement.
This is an agreement secured against the vehicle and you will not own the vehicle until you have made all of the payments, including any option to purchase fee. You can settle the agreement at any point by paying the outstanding amount.
Your vehicle is at risk of repossession if you do not maintain the contractual repayments. We receive a commission from the Finance Lender if you take out a finance agreement.
Hire Purchase (HP) - Representative finance example |
|
|---|---|
| Customer deposit
This is the amount you will have to pay today by debit/credit card. |
£99.00 |
| 60 Monthly payments of | £237.10 |
| Cash Price | £9,900.00 |
| Amount of credit
The total amount of money you are borrowing. |
£9,801.00 |
| Fees
This is the option to purchase fee that will need to be paid to settle the finance agreement. |
£10.00* |
| Total amount payable
This is the total amount you are paying to purchase the car. It includes the deposit, all of the monthly instalments, plus the GMFV and any fees. |
£14,335.00 |
| Term | 60 months |
| Fixed rate of interest
The interest rate applied to calculate the monthly payment. This does not fluctuate during the period of the loan. |
9.03% |
| Representative APR
Takes into account any fees associated to the loan in addition to the interest rate. This is considered to be the best indicator of the cost of credit. |
17.03% |
|
We act as credit brokers and we are not a lender. Finance is subject to status and finance company acceptance. We will introduce you to a limited number of lenders who may be able to help finance your purchase. These lenders may or may not pay us for the introduction. *Fees include £10 option to purchase fee. A guarantee may be required. |