Used Vehicle Finance at Motors Coalville

Buying a car doesn’t come cheap, even if you decide to go with our more economical used-vehicle option. Here at Motors Coalville, we have a wide range of high-quality used cars for sale, each of which we strive to make as affordable as possible to buy. This is why we provide flexible financing solutions that are designed to spread the total cost, helping motorists in Leicestershire to secure what might seem at first to be an unobtainable vehicle.

Let’s take a look at our financing options.

Hire Purchase

Hire Purchase (HP) is one of the oldest forms of car financing and it’s still widely used. Whereas monthly PCP payments pay off the depreciation of a car, Hire Purchase (HP) divides the overall value of a vehicle into affordable monthly instalments. With HP, a deposit is mandatory (the larger the deposit, the smaller the monthly payments, and vice versa). HP makes it possible to make a lump-sum payment, which will enable full ownership before the agreement is due to end.

• Hire purchase (HP) is one of the most commonly used methods to finance motor vehicles.
• The agreement is structured with fixed monthly payments and a final nominal “option to purchase” fee on payment of which, the customer takes legal ownership of the vehicle from the finance company. Unlike personal contract purchase (PCP), no “balloon” payment is payable at the end if the customer wants to own the vehicle.
• If the customer has a large deposit to put down, HP may be a better option for a customer than PCP.

Pros and cons of HP

With HP, you’re paying off the borrowed amount more quickly than with PCP.

Unlike PCP, HP comes with no annual mileage restrictions and doesn’t require a final, larger ‘balloon’ payment.

With HP, you’re working towards full ownership, which means there’s no option to hand the car back.

Personal Contract Purchase

Personal Contract Purchase (PCP) allows you to put down a deposit, followed by manageable monthly payments, which are made over a predetermined length of time. Before the agreement comes to its end, you’ll be presented with four options:

• Pay a final ‘balloon’ payment (otherwise known as an Optional Final Payment (OFP) or Guaranteed Future Value (GFV)), which will secure you the car for good
• Take advantage of a part-exchange deal, which will allow you to choose a newer model
• Refinance the balloon payment with a new loan agreement in order to make monthly instalments more manageable
• Hand the vehicle back to us and walk away (essentially, this means you’ll have rented the car)

Pros and cons of PCP

PCP is a flexible car-financing option which offers monthly payments that tend to be lower than those available with Hire Purchase. However, you may be liable to excess mileage fees (an agreed limit is set at the beginning of the term) and any damages incurred.

Though monthly PCP payments are typically lower than their HP equivalents, interest charges will likely be higher.

If you’re thinking of paying as large a deposit as possible, you may be better off going with Hire Purchase. This is because, with PCP, there’s a chance that the vehicle will be worth less than the balloon payment because of deprecation, resulting in negative equity.

Get in touch

If you would like to know more about how car financing can help you purchase a high-quality used vehicle, please get in touch with the Motors Coalville team today.

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“We are a credit broker and not a lender. We can introduce you to a limited number of lenders and their finance products. We are not an independent financial advisor. We may advise you on the products, subject to your personal circumstances, though you are not obliged to take our advice or recommendation. We do not charge you a fee for our services. Whichever lender we introduce you to, we will typically receive commission from them (either a fixed fee or a fixed percentage of the amount you borrow). For your reassurance, all of the lenders we work with could pay commission at different rates, but the commission we receive does not influence the interest rate you will pay. Our aim is to secure finance for you at the lowest interest rate you are eligible for from our panel of lenders.”