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HOW CAR FINANCE WORKS | COMPARE PCP, CONTRACT HIRE, HIRE PURCHASE (HP) & LEASE DEALS


If you need to replace your car or other
vehicle then two popular forms of finance are hire purchase (HP) and
personal contract plans (PCP). Under both these options the finance company owns the car while you make the regular payments. So what’s the difference between the two? With HP, provided you keep up your payments, at the end of the loan period you own the car. With PCP you can delay the decision to own the car until the very end. In fact with PCP there are three final outcomes to choose from: 1) Hand the car back with no further costs 2) Part exchange the car as part of a new
PCP deal 3) Purchase the car outright with a final balloon payment. If you have no desire to ever own the car then a PCP arrangement could be the most cost effective way of getting a new car. Also keep in mind that choosing a car
brand that depreciates more slowly could also help to keep your monthly costs
down. After all what you’re really paying for is the depreciation of the car plus
some interest. Discover more about car finance at Solution Loans today. www.solution-loans.co.uk/car-finance/

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