Financial Services
Here at Helston Garages, we have a wealth of experience in financial services spanning over many years within the Automotive industry. This enables us to help arrange very competitive finance packages to help you buy the car you want in the way that suits you best.
Many manufacturers have their own finance packages. To help those of you who are not planning on a buying a vehicle outright, we have provided information on some of the financial schemes available.
Personal Contract Purchase (PCP) Finance
PCP generally offers a lower cost and more flexible alternative to Hire Purchase. A smaller monthly payment is achieved by allowing you to finance the difference between the purchase price of the vehicle, and the projected value of the vehicle at the end of the Contract Term. PCP also offers great flexibility at the end of the contract.
How it works
PCP has been developed to allow you to change your vehicle more often than other forms of finance as effectively all you are paying for is the depreciation of the vehicle, and you have the comfort of knowing that we will guarantee to buy back your car back at the end of the contract at a pre-agreed price set at the start. This price is known as the "Guaranteed Future Value (GFV)".
The contract can be set from 18 to 60 months allowing you the flexibility to decide how long you would like to keep the car before you change it. When you reach the end of the contract you then have three options:
- Retain: Pay the guaranteed future value and option to purchase fee and the car is yours
- Return: Give the car back with nothing to pay (subject to mileage and fair wear and tear)
- Renew: Part Exchange your car and use any available equity as a deposit on your next new car
Pros
- Monthly payments on a car financed by PCP are usually lower than if your car is financed by a Hire Purchase agreement.
- If you decide not to buy the car, you can simply walk away when you've made all the payments. Subject to mileage and fair wear and tear.
- Similar to PCH, you can drive away a new or used car every few years (dependent on the chosen term) without worrying about selling it on.
- If your car is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new car.
Things to consider
- If you want to buy the car you will need to pay your final balloon payment (the Guaranteed Future Value).
- Similar to PCH, you will need to agree on a mileage allowance at the beginning of your contract and there may be excess mileage charges if you exceed this.
- You won’t be able to sell the car without settling the finance.
- You won’t own the car until you have made all of your repayments.
- You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.
Hire Purchase (HP) Finance
Hire Purchase is a popular way of spreading the cost of your car. Just choose how much you want to borrow, pay a non refundable deposit and repay with fixed monthly payments over any period up to 60 months. At the end of the contract, the car is yours.
Pros
- You’ll be able to drive away a car that you may not have managed to buy outright.
- Unlike a PCP or PCH contract, you won't need to estimate your mileage at the start of your Hire Purchase agreement, so you'll avoid excess mileage charges.
- Once you’ve made your final monthly payment, including the option to purchase fee, you'll have full ownership of the car.
Things to consider
- Monthly payments may be higher than some other finance options, such as PCP, as you're paying off the full value of the car.
- You won’t be able to sell the car without settling the finance.
- You won’t own the car until you have made all of your repayments.
- You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.
Personal Contract Hire (PCH) Finance
PCH is becoming an increasingly popular way to drive away in a new car. It offers a pure lease arrangement, with no option to own the car as part of the scheme
Pros
- It’s hassle free, as you can drive away a new car without worrying about how you'll re-sell it.
- Most leasing companies will offer an option with maintenance built in, eliminating unexpected repair bills.
- Your monthly payments on the car will be much lower than if you were buying it
- You will have access to new cars that you may not have been able to afford to buy.
Things to consider
- There’s no option to purchase the car at the end.
- You will need to agree on an annual mileage allowance at the beginning of your contract – there may be a mileage charge if you exceed this.
- Just like your mobile phone contract, you are tied in for the full duration of the agreement and there may be significant charges if you need to change or stop the contract.
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Would you like to know more?
Get in touch with a member of our team who will happily discuss your situation and help you with any questions you may have.