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When buying a new or used Kia car, it’s important that you’re able to invest in a manner that is affordable and cost effective. As such, we’re delighted to be able to help you secure the most competitive rates of vehicle financing, with both Hire Purchase and Personal Contract Purchase arrangements helping you spread the cost into manageable amounts. Learn more about these two buying schemes now, and liaise with a member of the Brayley Kia team to discuss in more detail.
Hire Purchase
Hire Purchase is a traditional form of vehicle financing that enables you to spread the cost and take full ownership of the car. After paying an initial deposit, you will be responsible for paying off the remainder of the vehicle’s value over an agreed period of time, with fixed monthly repayments making it manageable to invest. At the end of the agreed term, and after paying the option to purchase fee, you will be the full owner of the vehicle with no further obligations. In addition, if you wish to settle the finance early, you can request a settlement figure which covers all outstanding payments and interest.
Personal Contract Purchase
Offering more affordable monthly repayments is a Personal Contract Purchase arrangement, which also provides greater flexibility and is ideal for those that like to change cars on a frequent basis. Following payment of your deposit, our sales experts will calculate the Guaranteed Future Value of the vehicle at the end of the agreement. You will then pay off the difference between the sale price and the Guaranteed Future Value through fixed monthly repayments. At the end of the term, you can choose to pay the outstanding balance to become the full owner, take out a new financing plan, or simply return the vehicle with no further obligations.
To learn more about the specifics of each financing package, feel free to liaise with a member of the team at Brayley Kia today.
Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or a used car.
It is similar to a Hire Purchase agreement as you will usually pay an initial deposit, followed by monthly instalments over a term typically between 18 to 48 months.
What makes PCP different to Hire Purchase (HP) is that your monthly instalments are paying off the depreciation of the car, and not its entire value, over the course of the term. Then, when you get to the end of your agreement, there is a final, balloon payment that must be made if you want to keep the car. The balloon payment is often referred to also as the Guaranteed Future Value (GFV).
You can normally settle your agreement early by asking the finance company to provide you with a settlement figure. However, the finance company will require you to pay off the difference between what your car is worth, and what you still owe and there may be a difference which is known as negative equity. On the other hand, you may find that at the end of your term your car is worth more than the Guaranteed Future Value, which means you will have some positive equity to contribute towards your next car.
Hire Purchase is a way to finance buying a new or used car. You will normally pay an initial deposit and will pay off the entire value of the car in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the car outright.
The short answer is yes, you can end your finance early. There are different provisions within each finance agreement that allows you to do just that. If you have got through two-thirds of the way through your finance agreement, the options to end the finance agreement early open up.
For a Hire Purchase agreement, there is an option of paying it off early through a settlement fee. A settlement fee covers the cost of any remaining unpaid instalments and interest payments remaining on the agreement. Once the settlement fee is paid, you take full ownership of the car early.
Under a Personal Contract Purchase agreement, you can also pay a settlement fee for bringing the agreement to an end early. After that, you can choose to hand the car back or you have a second option. Through a PCP agreement, you can take full ownership of the car by paying off the remaining Guaranteed Minimum Future Value also known as a balloon payment.
