Your Finance Options

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There are five core options when it comes to vehicle financing:

Hire Purchase, Personal Contract Purchase, Lease Purchase,

Personal Contract Hire and Business Contract Hire.

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As with any financial decision, it’s important to understand what you’re signing up for.

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Hire Purchase

HP agreements are pretty straight forward. You can choose to pay a deposit. You then pay off the value of the car, plus interest, in monthly instalments. The agreement is over a fixed term. There is no balloon payment at the end of the agreement.

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PCP

If you go for a PCP deal, you can choose to pay a deposit and then make a set number of monthly payments over a set term. At the end of the term you have a few options: Return the car and walk away. Pay an optional balloon payment if you want to purchase the vehicle (this balloon payment can also be refinanced). Or you can simply part exchange and move any equity into a new vehicle.

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Lease Purchase

You can choose to pay a deposit and then make a set number of monthly payments over a set term. At the end of the term you have a few options: Pay an optional balloon payment if you want to own the car outright (this balloon payment can also be refinanced) or simply part exchange and move any equity into the new vehicle.

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Personal Contract Hire (PCH)

These are more commonly known as car leasing agreements and is similar to renting a car. You pay a deposit, pay an agreed monthly amount over a set term and get use of the car for the duration of that term. 

You will hand the car back at the end of the contract – there is no option to purchase.

 

Business Contract Hire (BCH)

BCH deals are like the above but priced excluding VAT.

If you’re a business customer, there are tax incentives based on the CO2 emissions of the vehicle that could benefit you. There are also benefits if you choose an eco-friendly vehicle.

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