Used Vehicle Finance at Motors Coalville

Purchasing any used car doesn’t come cheap, so being able to rely on affordable vehicle financing is essential. At Motors Coalville in Leicestershire, we work hard to ensure that all vehicles are fairly priced and offer the quality you’ve come to expect from the Ford name, providing reliable motoring and lasting performance. We’re also delighted to be able to offer competitive financing packages that enable you to spread the cost of purchasing, with both Hire Purchase and Personal Contract Purchase schemes available. Learn more today.

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    Hire Purchase

    Arguably the most straightforward of purchasing schemes, Hire Purchase enables you to pay an initial deposit followed by fixed monthly repayments over an agreed period of time. These payments pay off the outstanding balance on the vehicle meaning that, at the end of the term, you will be the outright owner of the model.

  • 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.

Personal Contract Purchase

Like Hire Purchase, a Personal Contract Purchase enables you to pay an initial deposit followed by fixed monthly repayments. However, these payments cover the difference between the sale price and the Guaranteed Future Value of the car at the end of the term. As such, the monthly costs can be lower compared to other schemes. At the end of the term, you also have the flexibility to either return the model, take out a new financing scheme, or pay the Optional Final Payment in order to become the full owner of the car.

  • Personal Contract Purchase (PCP) is a type of hire purchase agreement (HP) which is often used by customers wanting to change or upgrade their vehicle on a regular basis.
  • The agreement is structured with regular monthly payments and a final “balloon” payment, being the estimated value of the vehicle at the end of the agreement, based on the agreed annual mileage and predicted wear and tear over the period. This is called the ‘Optional Final Payment’ (OFP), also sometimes referred to as the ‘Guaranteed Future Value’ or ‘GFV’.
  • At the end of the agreement, customers will have four options:  1  Pay the OFP and nominal option to purchase fee and own the vehicle outright;  2  Part-exchange the vehicle for a replacement.  Any surplus after paying the OFP could then be used as a deposit for a new agreement;  3  Hand back the vehicle (for example, where the OFP is more than its actual value). If the annual mileage agreed at the start of the agreement is exceeded or if the vehicle is not in reasonable condition on its return, this may incur extra costs.  4 Re-finance the OFP via a new loan arrangement so that the customer can spread the cost over a period to suit their monthly budget.
  • A deposit is commonly made with PCP but, for a larger deposit, HP may be a better option because the customer risks losing that “equity” in the vehicle if it is handed back at the end of a PCP agreement.
  • PCP monthly payments will be lower than for HP on equivalent terms.  But overall interest charges will be higher on a PCP because a portion of the credit advanced (in the form of the OFP) remains unpaid until the end of the term.

Want to learn more about financing? Get in touch with the team at Motors Coalville 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.”