![]() ![]() PCP finance sees you pay a deposit at the start of an agreement, set monthly payments for the duration of the deal (typically two to four years), and then an optional final balloon payment. HP agreements are not as popular as PCP deals (see below), partly because they are less flexible, and partly because they tend to bring higher monthly repayments. Hire Purchase (HP)Ī Hire Purchase agreement is a type of finance that sees you rent a car over a period of time, with your monthly repayments paying off the vehicle, which you will own outright at the end of the deal. Secured loans tend to bring lower interest rates than unsecured loans. An unsecured loan, also known as a personal loan, meanwhile, will see money lent to you without you having to put an asset up as surety. Loans can either be secured (meaning you offer an asset – typically your house) as security, meaning the asset can be repossessed if you fail to keep up repayments. You’ll need approval for a loan, must make repayments on time and have a good credit standing. Taking out a loan is and using the money from this to buy a car outright is another option worth considering, particularly if you can find a favourable interest rate. You will own the car outright from the off, with no ongoing payments – although you will have to be mindful of depreciation and other ownerships costs, and could invoke heavy interest payments if you are buying a car with a credit card and don’t pay the balance off swiftly. You can pay the full costs of a car upfront with savings and any part-exchange you may have. Your options for buying are: Cash or credit card ![]() What are the different ways to buy a car?īuying will see you take outright ownership of the car, or have the option to do so in the case of PCP finance. During the period of the lease, you will not own the car – it remains the property of the finance company, and if you do not keep up repayments the car can be repossessed. This is typically two to four years, while you can vary the size of your deposit, with a larger downpayment resulting in lower monthly outgoings.Īt the end of the lease period, you’ll need to hand the car back, with no contractual option to purchase the vehicle – although some leasing firms may let you buy it if you ask. Personal Contract Hire (PCH) is the main way of leasing a car, and this see you pay a deposit followed by a series of monthly rental fees for an agreed amount of time. What is leasing and how does it work?Ī lease deal is essentially a long-term rental. The vast majority people who purchase new cars do so using a Personal Contract Purchase, or PCP, but leasing – which is essentially long-term rental – has been growing in popularity in recent years, with an estimated five million leased vehicles in the UK, of which around 1.9 million are said to be private leases.Ĭould leasing be right for you? This article will help you decide. Should lease or buy your next car? It’s a question you may be pondering when it comes to getting a new set of wheels, and it can be tricky to decide which way is best for you. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |