Car Sales Opening Hours
| Mon - Fri | 09:00 - 18:00 |
| Saturday | 09:00 - 17:00 |
| Sunday | By Appt Only |
| Service & Repairs | |
| Mon - Fri | 08:00 - 18:30 |
| Saturday | 08:00 - 13:00 |
| Sunday | Closed |
Our Location
Unit 1
Sovereign Way
Tonbridge
Kent
TN9 1RH
01732 357 182
More details about Car Finance
Cash or cards are not the only way to pay for your new car, there’s also the option of finance. Finance allows you to spread the cost of your purchase with a series of monthly re-payments over a fixed term agreement, typically 12, 24, 36, 48 or 60 months. Depending on your chosen vehicle’s age and mileage, you can select either a Hire-Purchase Agreement (HPA) or Personal Contract Purchase (PCP). The following is a quick guide we have created for your reading to highlight the key points, advantages and disadvantages of both types of agreement.
Hire-Purchase Agreement
HPA are secured loans that give the lender certain rights over the vehicle until the HPA is finished. You pay for the entire cost of the car and once you have finished paying your monthly instalments and a final nominal transfer fee at the end of the HPA you will retain complete ownership of the vehicle.
What are the advantages of a Hire-Purchase Agreement?
- HPA interest rates are contractually fixed to the agreement and cannot fluctuate over time and therefore your monthly instalment does not change making for better medium-term personal financial planning.
- HPA is cheaper than a (‘unsecured’) personal loan because the vehicle’s ownership is retained by the lender (‘secured’) meaning if you fail to pay your instalments the vehicle may be repossessed.
- HPA is relatively quick, easy and simple when compared to a personal loan. You do not need to meet ‘the bank manager’ to discuss your personal finances at length.
- HPA can require a smaller deposit (sometimes none at all).
- HPA can be used for older, higher mileage vehicles.
- HPA allows you to keep your own cash or savings in-tact and unused, meaning greater financial security and more interest earned.
What are the disadvantages of a Hire-Purchase Agreement?
- HPA monthly re-payments will be much higher.
- HPA makes you pay interest on the full value of the car, even if you do not plan to own the vehicle for longer than 2 to 4 years.
- HPA have administration fees which will increase your monthly re-payments.
- HPA requires you to pay a termination fee should you wish to cancel the contract.
Personal Contract Purchase
With Personal Contract Purchase (PCP), you pay a fixed monthly fee to obtain and drive your new car for a typical period of 24, 36 or 48 months. Legal ownership is retained by the lender until the end of the contract period at which point you will have two options; purchase the vehicle for the price that you agreed with the lender at the start of the contract, or if you think the vehicle is worth less than the pre-agreed price, return it to the lender.
What are the advantages of a Personal Contract Purchase?
- PCP allows you to drive a new vehicle with a small upfront payment.
- PCP monthly instalments tend to be significantly less (up to 50%) than the equivalent personal loan re-payment.
- PCP exposes you to less financial risk because you do not have to re-pay the lender the entire cost of the vehicle.
- With PCP you not have to re-negotiate the value of your vehicle at the end of the agreement when purchasing your next car.
What are the disadvantages of a Personal Contract Purchase?
- PCP is primarily configured for new vehicles or those less than 3 years or with 30,000 miles.
- PCP puts the cars ownership with the lender until a final payment is made.
- PCP restricts your annual mileage allowance to protect the vehicle’s value at the end of the agreement. If you exceed this you may be liable for a penalty fee.
- PCP will require you to pay a severance fee should you wish to cancel the contract earlier than agreed.
- PCP does not allow you to make any modifications to the vehicle without permission and if you do so you may incur a penalty fee.
