FINANCE
Once you’ve made your mind up what sort of car you would like to drive the various different types of finance on offer can seem confusing.
Here we’ve simplified the main types of finance we offer. Where possible we’ve tried to avoid using jargon but please feel free to email or call if anything is unclear. These are only intended as brief summaries and we’ll be happy to explain them fully to you.
Personal Finance
Personal Contract Hire (PCH)
Rapidly gaining in popularity this works particularly well if you are opting out of a Company Car Scheme. Like Business Contract Hire it is exactly like renting a car for a pre-agreed term and mileage only much cheaper. All of your motoring costs (with the exception of insurance and fuel!) can be paid in one fixed monthly sum.
Benefits Include
Fixed Budgeting
Low Initial Payments (Typically equivalent to 3 Monthly rentals)
No Depreciation
No Hassles Disposing Of The Car
No Balloon Payment To Find
Simplicity
Personal Contract Purchase (PCP)
Again very similar to PCH in that the vehicle is supplied for a fixed length of time and pre-agreed mileage. This time however an optional final payment called the Guaranteed Future Value (or GFV) is set at the start. This allows you to decide at the end of the term whether or not to make the final payment and keep the car (ideal if it’s worth more than the GFV) or hand the car back and walk away.
Benefits are similar to those with PCH, typically initial payments are low but if you decide to pay more at the start the monthly outlay will reduce.
Hire Purchase
We can offer very good rates on traditional Hire Purchase Agreements
Business Finance
Contract Hire
Sometimes referred to as an operating lease Contract Hire is an extremely simple and popular way of funding vehicles in the UK. Put simply, the car is rented over an agreed period (the TERM) usually between 18 and 48 months to cover a pre-agreed mileage. Additional services such as maintenance, servicing, tyre replacement can be added on to the contract for a fixed monthly fee.
Benefits Include
Off Balance Sheet Funding
Fixed Monthly Budgeting
Low Deposit
No Vehicle Depreciation Risk
VAT Partially Recoverable
No Hassles Upon Disposal
Contract Purchase
Similar benefits to contract hire with the opportunity to own the vehicle at the end of the contract. Typically used for higher value vehicles a ‘Balloon Payment’ is set at the start of the contract based on the likely residual value of the vehicle at the end of the contract term. Usually this is an optional payment whereby if the business decides not to own the car it can hand the vehicle back to the finance company at the end of the contract.
Benefits Include
Fixed Monthly Budgeting
Low Deposit
Capital Allowances Available
No Vehicle Depreciation Risk
Option to Own the Vehicle
Please Note
This section is only meant to be a brief guide. Please contact us if you require more detailed explanations.