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Car finance explained

Number Stoneacre Moior Gruup CAR FINANCE EXPLAINED We explain the differences between the sometimes confusing finance terms, such as HP, PCP & PCH that rather sound like sauce names. DID YOU KNOW? Research by peer-to-peer lender Zopa found out According to Finance & Leasing Association. that.. 9 out of 10 £160 UK buyers are confused by car finance The average cost of running a car per month options. and double that if the car is on finance. up to £11,000 Fuel This much the average buyer can save Is the major expense, costing Brits on during their lifetime by comparing different average, £67.63 a month. financial deals. 1 HIRE PURCHASE (HP) £ £ £ You can finance a new or used car with this option. The process 1. Start with initial deposit or a part-exchange that can act as a deposit. 2. Pay monthly payments with a fixed interest rate that last from 36 to 60 months (3 to 5 years). 3. When the payments are complete you own the car. PERSONAL CONTRACT PURCHASE (PCP) With this finance option you have three choices: 1. Pay the balloon or a guaranteed future value (GFV) payment to own the car. 2. Return the car to the dealer. 3. Part-exchange the car for a new one. PERSONAL CONTRACT HIRE (РCH) As the name implies, you essentially hire a car. Advantages: • Sightly lower monthly payment • Can change the cars more frequently when compared to PCP and HP Disadvantages: • No option to own the car • Mileage allowance PERSONAL LOANS 4 An excellent option if you want to own the car NOW. Advantages: • The loan is not secured against a car which means it 3. can't be repossessed Disadvantages: • Poor credit history will affect if you're eligible for the loan COMMERCIAL BUYERS BUSINESS CONTRACT HIRE (BCH) This option is best suited for companies - the latest car can simply be hired between 24 to 48-month period. Advantages: For one fixed monthly payment, these costs are included: • Leasing service, maintenance, servicing & road tax Disadvantages: • Additional costs if damage is above Fair Wear and Tear FOR MORE INFO VISIT STONEACRE.CO.UK 2. 3

Car finance explained

shared by demiva on Jun 23
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This Stoneacre infographic explains different types of car finance, what's the process like, as well as advantages and disadvantages of each type.






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