Financing your Car

If you don't want to pay for your new car in one lump sum, car credit is a useful alternative. From our agreements with major national finance companies we are able to offer several different types of funding.

Below we list some frequently asked questions that give you an insight into your finance options. If you can’t find the answer to your question here contact us or call in at one of our showrooms for a chat, there’s no obligation to buy!

Q: What if I have no deposit, or owe more than my car is worth?

A: Because our cars offer excellent value we can, subject to status, accommodate customers who wish to pay no deposit, owe more than their car is worth, or require cash back to settle a personal loan on their vehicle. We can settle the outstanding finance on your current car as part of the overall package. This will also avoid the 7-10 day delay that finance companies enforce if you settle the car yourself.

Q: What if I’m not sure about my credit history?

A: We have an online service available where we can pre-approve your finance. The service is totally free, only takes a minute or two and will not affect your credit rating. Please click here to apply

Q: How long will it take to sort the paperwork out?

A: We have agreements in place with major national finance companies that make the process of funding your new car as hassle-free as possible.

We require only limited information and, in most circumstances, one or two key proofs of identity. Your finance proposal can be processed, and accepted, normally within a few minutes. You don’t even have to wait for funds to clear in your account before collecting your new car, simply bring your proofs, check through and sign your finance document and in many cases you can drive your car away there and then.

You could be in your new car in a couple of days, a lot quicker than the 5-10 days it could take with a direct lender.

Q: What is Hire Purchase – HP?

A: Hire Purchase is the most common way to fund the purchase a new or used car using Hire purchase finance is very similar to a bank loan, where you choose how much deposit to put forward or use your part exchange and make monthly repayments over a 2, 3, 4 or 5 year agreement. And at the end of the finance agreement you have brought the car and it's yours. With most Hire Purchase you have the added bonus of Voluntary Termination Rights this means that once you have repaid half of the loan you can hand the keys back to the finance company and walk away from the loan without any penalties.

Key Benefits;

• Zero Deposit Needed.
• Fixed Rate for term of loan.
• No tie to mileage contract.
• No lock in and settlement can be made at any stage of the agreement.
• Voluntary Termination Protection rights.

Q: What is Personal Contract Plan – PCP?

A: PCP has become one of the most popular ways to purchase a new or nearly new car today, it allows customers to purchase a car of their choice at a very attractive fixed monthly finance payment, with the benefit of a low initial deposit outlay and a guaranteed minimum future value (GMFV) at the end of the agreement. PCP is particularly useful if you are a company car driver opting out of the company car scheme (Cash for Car), because you can use your company car allowance or mileage reclaims to fund your monthly PCP payments and avoid paying excessive company car taxes.

Personal Contract Purchase provides the benefits of driving a higher specification vehicle for a lower monthly payment. Unlike the traditional car purchase plan, this is achieved by deferring a percentage of the total cost of the vehicle until the end of the contract which is known as the GMFV, then at the end of the agreement the customer has three options:-

Option 1
If you think the vehicle is worth less than the GMFV you can simply return it to the finance company. As long as the vehicle is in good condition and has not exceeded the agreed mileage, you have nothing more to pay. The finance company Guaranteed this future value and they will absorb the loss.

Option 2
If you want to keep the vehicle, you simply pay off the outstanding GMFV to the finance company. Some lenders will allow the GMFV to be spread over a secondary period and be refinanced again.

Option 3
Thirdly, you can part exchange the vehicle with a motor dealer (Preferably Us) for your next new vehicle. If the trade-in value is greater than the GMFV, this sum can be used towards a deposit on the new agreement. Alternatively, you can sell the vehicle privately and keep any profit over and above the GMFV.

Excess Mileage
At the beginning of the agreement, you decide on the total mileage for the contract period and if you decide to hand your vehicle back to the finance company and your mileage exceeds the agreed mileage, you simply pay a fixed amount for every extra mile.

Wear & Tear
It is in your interest to minimize the vehicle's 'wear and tear' and not exceed the agreed mileage. When the agreement has finished, the vehicle may well be worth more than the GMFV, providing you with extra value. In simple terms 'normal wear and tear' means that for its age and mileage, the vehicle is in fair working order, condition and repair. A detailed guide will be provided to you by the finance company at the start of your agreement

Q: What is Lease Purchase?

A: Lease Purchase is sometimes referred to as Hire Purchase with a balloon and is structured in a similar way to Personal Contract Purchase (PCP).

The customer will normally benefit from a slightly lower finance rate with a Lease Purchase product as there is no guarantee offered at the end of the agreement, the deferred capital lump sum amount at the end of the agreement is known as the Residual Value (RV), and this has to be paid by the customer for outright ownership. Deposits for Lease Purchase are flexible and are normally a minimum of 10% and a maximum of 50% of the total vehicle price, repayment periods are taken over 3 or 4 years typically.

The Residual Value (RV) (sometimes called the balloon) at the end of the agreement reduces the regular monthly payments accordingly, thus making vehicles that traditionally have a strong Residual Value (RV) more suitable for this type of product as they make repayments far more affordable.

The Residual Values (RV) is calculated and set at the beginning of the agreement and although this is not payable until the end. At the end of the agreement, there are realistically two options, 1. Pay off the residual value in cash or settlement by part-exchange or 2. Some lenders will allow the residual value to be spread over a secondary period and be refinanced again.

Key Benefits

• Lower deposits available.
• Cost effective rentals due to residual values.
• No tie to mileage contract.
• No lock in and settlement can be made at any stage of the agreement.

Q: What is Finance Lease?

A: This funding package is highly recommended for companies seeking to switch from outright purchase to leasing for VAT reasons. At the end of the lease any profit or loss on the disposal is passed on to the client as a percentage of sale proceeds. Vehicles funded under this option must be treated as an asset and shown on the balance sheet.

Q: What Is Balloon Finance?

A: Finance with a balloon payment is rapidly becoming the preferred choice when choosing to fund a new car; it is the same as standard hire purchase or personal loan with one significant distinction.

Part of the cars cost is deferred until the end of hire purchase period. This is known as a hire purchase "balloon payment".

One key characteristic of a hire purchase balloon payment agreement is that the monthly repayments will be lower. This offers you the chance to choose a higher specification car.

At the end of the hire purchase contract, you can either make the hire purchase balloon payment to own the car outright, or you can refinance the balloon over a short term or you can part-exchange or sell privately to pay off the balloon, often leaving you with a cash lump sum.

Advantages of Balloon Finance:

• Low deposit - keeps valuable personal or business cash available
• Lower fixed monthly payments - perfect for budgeting
• A better car - lower payments can help you choose a higher specification car
• Flexibility - does not compromise your other lines of credit
• Assets - you gain vehicle ownership
• Tax benefits - Tax allowances for business users
• VAT free - no VAT on payments
• Fast approval process
• Deposit and repayment terms to suit you