Deciding you’re going to get a new car is an exciting time. There’s so much choice, and several ways to pay for it too! We’re here to take the stress away and help you find the solution that works best for you.
Apart from paying cash up front, there are typically two ways of paying for your car – these are Personal Contract Purchase (PCP) or Contract Hire (or Vehicle Operating Lease). But what exactly are they?
Personal Contract Purchase
This is ideal if you want the flexibility to renew, return or buy your car after a period of time.
You pay a deposit (usually up to 40% of the value of the car), and decide over what length of time you want to repay the balance. This is normally 2, 3 or 4 years. An optional final payment is worked out based on your predicted mileage each year which could be anything from 6,000 to 30,000.
At the end of your agreed time period, you have three choices:
If you decide to keep it you will need to make the final payment and the car becomes yours.
The small print
Terms and conditions apply. You must be 18 or over. Finance subject to status. The finance provider may require a guarantee or indemnity. You will not own the vehicle until all payments are made.
You will be responsible for any loss, damage or deterioration of the goods except through fair wear and tear.
Although you won’t own the car at the end of the contract, this is a convenient solution for small businesses and limited companies who want a fixed monthly payment. You’re effectively renting the vehicle which is leased to you for an agreed period (typically one to three years). So long as you have kept within the mileage and there is normal wear and tear, there is nothing left to pay when the vehicle is returned at the end of the contract.
The fee is paid to the finance company who will take responsibility for depreciation and administration costs. For an extra cost, you could choose a contract that includes maintenance and servicing.
The main benefits are:
Make sure you check on the customer service and what support you will get if things go wrong with your car. You are paying for a ‘no hassle’ rental so it’s important to be clear what you’re getting.
Feel free to call us for more information or a quotation on 01344 882511
Baileys New Cars Direct Ltd is authorized and regulated by the Financial Conduct Authority for credit broking activities with firm reference number: FRN 775453.
Baileys New Cars Direct Ltd is not a lender or car finance provider. We provide credit broking services only with lenders which are affiliated to the car dealers we trade with