Capital Car Finance specialise in three main methods of regulated finance, namely Personal Contract Purchase [PCP], Lease Purchase [LP] and traditional Hire Purchase [HP].
All our car finance products will help you to buy the highest specification car for a lower monthly outlay and are available for all cars up to 6 years old.
Please find more detailed information below to give you a better understanding of how all these car finance products work.
If you are buying your vehicle from a UK motor dealer and are not happy with what they have to offer, then why not give us a call to see if we can save you money!
The car finance products we offer are Personal Contract Purchase (PCP) Lease Purchase (LP) or Hire Purchase (HP) car finance schemes, all of which are designed to help save you money compared to using dealer finance.
Our Representative APR (Annual Percentage Rate) which is the total charge for the loan including interest, is generally much lower than your supplying dealer, which means that your monthly payment and the overall interest payable is lower.
The APR offered upon acceptance however may differ slightly depending on your credit history and personal circumstances, this is now the same for every broker and dealer in the UK as new laws were brought in by the FCA in January 2021.
Each loan application is assessed by our lender on an individual basis, so it’s always a good idea to check your credit history first prior to making an application with us.
Lease Purchase is sometimes referred to as Hire Purchase with a balloon and is structured in a similar way PCP, however unlike PCP there is no guarantee offered at the end of the agreement, customer can defer a capital lump sum amount until the end of the agreement, this is known as the Residual Value.
PCP is one of the most popular types of funding a new or used car today, PCP allows customers to purchase a car of their choice at a fixed monthly finance payment, with a low initial deposit outlay and a guaranteed minimum future value (GMFV) at the end of the agreement.
Hire Purchase (HP) is very similar to borrowing a sum of money from a bank and paying it back over a fixed period of time, with interest.
The term “secured loan” means exactly that, a loan that the lender can secure against an asset (in this case, the vehicle).
Hire Purchase is a type of secured loan which are often preferred over alternative (unsecured) loans
HP gives you additional rights over those of a personal loan because it’s secured on the vehicle.
Contract Hire is available for businesses and is basically a long-term rental agreement which can also include service and maintenance too.
Your monthly payments will be subject to VAT though as its a rental. If you are a VAT registered UK business you can reclaim this back from HMRC.
The monthly rental is calculated from the length of contract and the estimated annual mileage. At the end of the agreement period the vehicle is returned to the contract hire company.
PCP allows customers to purchase a car of their choice at a fixed monthly finance payment, with a low initial deposit outlay and a guaranteed minimum future value (GMFV) at the end of the agreement.
PCP car finance may be particularly useful if you are a company car driver opting out of the company car scheme (Cash for Car), because you may be able to use your company car allowance or mileage reclaims to fund your monthly PCP payments.
Personal Contract Purchase may provide you with the benefits of driving a higher specification vehicle for a lower monthly payment. Unlike Hire Purchase agreements, this is achieved by deferring a percentage of the total cost of the vehicle until the end of the contract which is known as the GMFV, then at the end of the agreement the customer has the following three options…
Return the vehicle to the finance company and if you have not exceeded the agreed mileage, there is nothing more to pay.
You may keep the vehicle and simply pay off or refinance the outstanding Guaranteed Minimum Future Value payment.
You can part-exchange your vehicle and if the trade-in value is greater than the GMFV, the difference is yours to keep.
Lease Purchase is sometimes referred to as Hire Purchase with a balloon and is structured in a similar way to Personal Contract Purchase (PCP).
The customer will normally benefit from a slightly lower finance rate with a Lease Purchase product as there is no guarantee offered at the end of the agreement, the deferred capital lump sum amount at the end of the agreement is known as the Residual Value (RV), and this has to be paid by the customer for outright ownership. Deposits for Lease Purchase are flexible and are normally a minimum of 10% and a maximum of 50% of the total vehicle price, repayment periods are taken over 3 or 4 years typically.
The Residual Value (RV) (sometimes called the balloon) at the end of the agreement reduces the regular monthly payments accordingly, thus making vehicles that traditionally have a strong Residual Value (RV) more suitable for this type of product as they make repayments far more affordable.
The Residual Values (RV) is calculated and set at the beginning of the agreement and although this is not payable until the end. At the end of the agreement, there are realistically two options, 1. Pay off the residual value in cash or settlement by part-exchange or 2. Some lenders will allow the residual value to be spread over a secondary period and be refinanced again.
Call us now on 01925 589020 for your quote with our latest rate and offers and let's see how much we could save you!
Capital Car Finance Ltd are fully authorised and regulated by the Financial Conduct Authority for consumer credit activity (FCA Registration Number 685925) We are a credit broker and not a lender, which means we act independently as an intermediary for a number of different finance providers.
We will receive a commission payment from our finance provider should you decide to enter into an agreement with them, typically this is either a fixed fee or a fixed percentage of the amount you borrow. The payment we receive may vary between different finance providers and product types. However, the payment received does not impact the finance rate offered. Details of the amount of commission we receive will be provided for you prior to completion. All finance applications are subject to status, terms and conditions apply, UK residents only, 18’s or over, Guarantees may be required.
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