The traditional, but still ever popular, funding option which gives the customer eventual ownership of the vehicle. A fixed cost, fixed period loan that allows you to spread the cost of the vehicle over a period of up to five years. The user is effectively the owner of the asset, but legal title to the car does not pass until the loan is fully repaid including the final payment which includes a nominal "option to purchase" fee. Monthly payments cover the capital cost plus interest and do not carry VAT. For business users the vehicles will be ON Balance Sheet.
For Private individuals and companies that want eventual ownership of the vehicle. A funding agreement where the purchaser acquires ownership when all the payments, including the option to purchase fee have been made. Part of the capital cost of the vehicle payment may be deferred into a "balloon" payment at the end of the agreement which equates to the anticipated value of the vehicle at the end of the leasing period.
A lease is a contract between a Lessor (the lender) and the Lessee (the customer) for the hire of a vehicle. The lessor retains ownership of the vehicle while the lessee has possession and use for payment of specific rentals and agreed period. If you would like to take up finance with us please click here and fill out our online form.
PCP is an increasingly popular choice for car finance. It offers the best in flexibility at the end of the agreement, together with low, fixed monthly payments. PCP is perfect if you are opting out of your company car scheme. Your company car allowance can fund your monthly payments, but there is no company car tax to pay. At the beginning of the agreement your car's guaranteed future value (GFV) is calculated, based on an agreed mileage and age. This is deferred as a final 'balloon' payment.
With PCP you don't have to commit to buying the car at the outset. You use it for an agreed period of time usually 1-4 years and then decide at the end of this period what you would like to do.
You have four options:
- Buy the car by paying an agreed minimum residual value.
- Part-Exchange the car for another.
- Sell the car privately (selling the balloon).
- Or, subject to mileage and condition, return the car with nothing more to pay (e.g. if depreciation resulted in negative equity).
The benefits of Personal Contract Purchase:
- Low risk, a minimum future value is guaranteed.
- Low deposit, doesn't tie up personal or business assets.
- Low fixed monthly payments, perfect for budgeting.
- Upgrade car, lower payments can help you choose a higher specification vehicle.
- Choice, buy the car, part-exchange it or just return it.
- Tax advantage, the cash alternative when you opt out of a company car scheme is not subject to company car tax.
- VAT FREE, no VAT on your payments.