Finance Plans at Motorvogue
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Latest News: The All-New Dacia Duster has won Value Car of the Year at the first ever Sun Motor Awards. Proving the popularity of the model, the Duster was voted for not just by a panel of journalists but also by the public in an online vote and praised for its build quality, off-road capabilities and affordability. “We did the maths — you can have a Dacia Duster for the same price as your daily coffee. The fact Sun readers can own a new family car for less than £10,000 in today’s world is downright amazing. Using well proven Renault parts, build quality is high, and its spec-sheet far exceeds its price tag. Surprisingly good off road, too. Without doubt the best car ten grand can buy": commented Nick Francis, Motoring Editor, The Sun on Sunday. Taking place for the first time, The Motor Awards, organised by the publishers of The Sun, The Times, The Sunday Times and talkSPORT, gave the chance for the readers and listeners to vote for their favourite new cars alongside experts in the motoring industry. Speaking on the latest award win for Dacia, Louise O’Sullivan, Head of Dacia UK, said: “We’re absolutely delighted to celebrate another award win for All-New Duster, particularly as this was voted for by the public as well as industry experts. It’s brilliant to see the All-New Duster recognised for its affordability combined with top-notch quality, which means amazing value for money for our customers.”  All-New Duster went on sale in the UK earlier this year, starting at £9,995, with a host of improvements over the previous model. Available in four trim levels, Access, Essential, Comfort and top-of-the-range Prestige, every single body panel on the car is new, with a fully revised interior for better quality and comfort as well as featuring many new technologies and safety features never before available on the Dacia range.

Finance Plans Explained at Motorvogue

From PCP to hire purchase, here's everything you need to know about financing your next car. 

Car finance might seem daunting, but in reality it's just a simple two-stage process.

The first stage is to decide on the type of car deal you want: loan, lease, hire purchase, or dealer finance. Then it's a simple matter of choosing the provider whose product best suits your needs.

Personal Contract Hire (PCH)

The word 'Hire' tells you what PCH is all about. Basically you're renting a car for (typically) two or three years, with an agreed mileage limit of (typically) 10,000 miles a year. There's no option to buy the car at the end of the contract; you just hand the keys back to the finance provider. In effect, your payments are only covering the car's depreciation.

While you're running it, you're responsible for the car's upkeep. On the plus side, the deposit is low (three or six months' rental is common), as are the fixed monthly repayments, and you can blunt the impact of repair bills by incorporating a maintenance element into the agreement. Check that a separate manufacturer servicing package won't be cheaper before you tick that box, however.

Cars that hold their value well are a good PCH option, because the difference in their new and three-year-old values will be smaller, so you'll repay a lower amount. Cars that plummet in value from new are a bad choice, because you'll repay a much larger amount.

Just as with PCP, you'll need to make sure the car is in good condition when you hand it back, or you could face additional fees as the finance firm cleans it up.

Go for PCH if you say yes to one or more of these statements:

You don't want to own a car, or suffer its depreciation
You like being able to change cars frequently
You like the idea of driving better cars than you could normally afford
You don't mind looking after cars

Personal Contract Purchase (PCP)

It's a bit like HP in that there's a deposit to pay, a fixed interest rate, and monthly repayments over a choice of lending terms, which are usually between 12 and 36 months.

Where PCP differs from HP is at the end of the term. Then you'll have three choices. You can:

  • Return the car to the supplier
  • Keep the car
  • Trade the car in against a replacement

The first option, returning the car, costs nothing, unless you've gone over an agreed mileage or failed to return it in good condition. In either case there'll be an excess to pay.

Keeping the car means making a final 'balloon' payment. This amount is the car's guaranteed future value, or GFV, which is set at the start of the agreement.

The GFV is based on various factors, including the length of the loan and the anticipated mileage as well as the car's projected retail value. If you exercise this final buying option, you can of course keep running the car, or you can sell it, pocketing any equity above the GFV that you've paid back to the lease company.

If you're trading the car in, any GFV equity can be used as a deposit towards the next one.

Just bear in mind that the GFV doesn't always contain a huge amount of equity at the end of the term - so when you're working out monthly costs, it's probably wise to factor in a few extra pounds per month that you can put away in preparation for the next deposit at the end of two or three years.

If the car has gone into negative equity – which can happen – you'll have to find all of that deposit if you want a further PCP. Shorter leases are more likely to come with more accurate GFVs and manufacturers are quite proactive in trying to get you out of a car early if they think there's scope to get you into a new one on a decent monthly rate; it's not uncommon dealers to call customers on three-year deals about a year early - because doing a new PCP keeps the buyer tied to that manufacturer for a further period of time.

Go for PCP if you say yes to one or more of these statements:

  • You want lower monthly repayments
  • You like the flexibility of options at the end of the agreement
  • You can confidently and accurately nominate your mileage

Hire Purchase

Under HP agreements, there's a deposit to pay – typically 10% – followed by fixed monthly payments. The car is owned by the HP company until the final payment – and any 'option to purchase' ownership-transfer fee – has been paid. Up to that point, the person making the payments has no legal right to sell the vehicle.

Nevertheless, some 'owners' do sell 'their' cars before the final payment. The good news for buyers of these 'non-paid-up' HP cars is that the law clearly protects private purchasers who buy without notice of any undischarged HP agreement.

No matter what the police or anyone else might tell you, you'll get a good title to the car if you buy an HP car under these circumstances. The finance company can take action against the seller if they wish, but it's not your problem.

The credit on an HP agreement is secured against the car, so it's like dealer finance in that the only the car can be seized in the event of a default. If you need to sell the car before the end of the agreement, you'll have to repay the outstanding debt first – and 'early settlement' fees may apply.

Go for HP if you say yes to one or more of these statements:

  • Eventual ownership is important to you
  • Your budget and circumstances suit fixed monthly repayments
  • Your disposable income is likely to decrease over the agreement term (eg if you're planning a family)
  • You like low-risk credit secured against the car only
  • You don't mind not owning the car until the debt is fully repaid
Motorvogue Bedford

Interchange Park, Bedford, MK42 7GB

TEL: 01234 867788

    


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Motorvogue Northampton

74 Kingsthorpe Road, Northampton, NN2 6HE

TEL: 01604 714555

    


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Motorvogue Clapham (Bedford)

87 High Street, Clapham, Bedfordshire, MK41 6AQ

TEL: 01234 354257

    


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Motorvogue Kings Lynn

Scania Way, Hardwick Industrial Est, King's Lynn, Norfolk, PE30 4LP

TEL: 01553 772644

    


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CONSUMER CREDIT & GENERAL INSURANCE
Motorvogue (Northampton)Ltd is an Appointed Representative of Automotive Compliance Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA No 497010). Automotive Compliance Ltd’s permissions as a Principal Firm allows Motorvogue (Northampton)Ltd to act as a credit broker, not as a lender, for the introduction to a limited number of finance providers and to act as an agent on behalf of the insurer for insurance distribution activities only.

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