TYPES OF FINANCE EXPLAINED

LEASE PURCHASE:

 

A lease purchase agreement lets you make regular payments, similar to a hire purchase agreement, but you own the car at the end of the fixed term. There’s a final ‘balloon payment’, usually paid at the end of the term. After that, the car is all yours. Before choosing lease purchase, this is what you should know:

 

  • You pay a deposit and then make monthly payments for the length of the agreement.
  • The balloon payment is normally based on what the car is conservatively expected to be worth at that point in time, taking into account the car’s mileage, its age and the length of the agreement.
  • The more the car holds its value, the more affordable the lease purchase agreement becomes. This makes lease purchase agreements very popular with owners of premium or luxury cars.

 

At the end of the agreement, you are required to pay the balloon amount (usually through a cash payment or via a second finance agreement. There’s no option to return the vehicle. A typical lease purchase agreement lasts between two and five years, but it is possible to fully or partially settle the outstanding finance at any point. To find out more about how to do this, get in touch and I’ll do my best to help.

 

To find out more about how lease purchase can help you to owning the car that you desire, please call on 07540723020 and ask for a quotation.

 

HIRE PURCHASE:

 

Choosing a hire purchase agreement allows you to pay for your car in monthly instalment’s and then you have the option to buy the vehicle at the end of the fixed term contract. Normally the APR (Annual Percentage Rate) is set before the contract begins, and loan periods are typically three to five years.

 

Here’s what you need to know:

 

  • Your finance agreement is secured against the vehicle
  • You are the vehicle’s registered keeper, which means you are responsible for insurance and maintenance
  • The finance company remains the legal owner until the amount borrowed has been fully repaid, including the ‘option to purchase’ fee covering the admin costs when ownership is transferred

 

Once you have found the vehicle you would like to buy, let me know how much you want to borrow, based on the price of the vehicle minus any deposit. Many of my customers choose to part-exchange their existing vehicle to help cover the deposit.

 

If you want to settle a hire purchase agreement – either partially or in full – before the end of the agreement, you can make early repayments.

 

To find out more about how hire purchase can help you to owning the car that you desire, please call on 07540723020 and ask for a quotation.
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