How To Buy A Car Through Finance

How To Buy A Car Through Finance

Buying a car outright isn’t feasible for a lot of people, so there are many options to finance a vehicle. When financing with Peter Vardy, there are 2 main types of financing: hire purchase (HP) and personal contract purchase (PCP).

Hire Purchase (HP)

Hire Purchase is hiring the car from the lender until the car is paid off in full. Once the monthly payments are complete, you will then own the car.  The more you can afford for a deposit, the lower your monthly payments will be.

A fixed monthly payment over a certain period is then agreed and you own the car after the final payment. The finance agreement will then end.

If you want to pay off the settlement figure earlier then this can be arranged by contacting your lender. The monthly payments on HP are higher than those of PCP. A huge benefit of HP is that you own the vehicle after the payment period ends.

Personal Contract Purchase (PCP)

A PCP agreement is similar to a hire purchase agreement, in that a deposit is often paid followed by fixed monthly repayments. The deposit amount can vary but the more you pay for the deposit, the cheaper the monthly payments will be.

The most common period of time for a vehicle on PCP is 48 months but it can vary from 12 months to 60 months. The longer the contract, the less the monthly payments will be. After the time period ends, the vehicle is returned to the lender. PCP is a great option for those who like to more regularly change their car and upgrade to the latest models.

We also have handy guides including how to buy a car online with Peter Vardy, and you can view our amazing range of new and used cars here.