Depending on people’s budget and flow of income will decide which is the best option out of PCP or Hire Purchase. There are pros and cons to both options and understanding these will work greatly in your favour. If you require more information about these after reading this blog, be sure to contact our team here at First Flexi Lease on 01392 249250 and a member of our team will be happy to help you.
Personal Contract Purchase Car Finance
The more popular route which people choose to go down is Personal Contract Purchase car finance (or PCP). With this option, you pay in monthly instalments over a course which suits you best, this is normally over 3 to 4 years. You then have the option at the end of your term to purchase the car by paying the rest off in one sum. This may not appeal to everyone so there are also a few other options you can choose. You can either give the car back, or you can use the difference between the final payment price and market price and get another car on a PCP finance scheme again.
This is a favourite of many because instead of financing the price of the car, you are almost paying for the depreciation, so the costs will decrease over the period it is under your ownership. It does not necessarily mean it’s cheaper, but the monthly costs are lower.
Hire Purchase Vehicles
As PCP has increased in popularity, Hire Purchase has become less sort after. However, this does not mean it doesn’t work for everyone or that it shouldn’t be considered! It can sometimes work out cheaper in the long run as you are essentially paying off the amount that you’re borrowing much quicker. The only downside to this for some people is that you don’t have the options to either give back the car or get a newer one at the end of the hire, this being because you own it at the end and would have paid off the full amount that the car is worth.
Another positive of this option is that there is no milage limits! This is because the future value doesn’t have to be calculated as you’re financing the whole cost of the car to own it at the end, with no balloon payment to pay at the end. This is seen as the quickest way to get to owning a car which you may not be able to buy outright, however it does require a little extra money to be leaving your pocket each month compared to a PCP.
Keep In Control of Your Car Finance
Come to us at First Flexi Lease and keep in control of your car finance. We are a reputable and trustworthy company which have been helping people drive their dream cars for many years. To find out more about how you can finance your next car through us, be sure to visit our website or call us today on 01392 249250. A member of our team will be sure to help in any way they can and answer your burning questions!