![]() ![]() The interest on the final payment is calculated differently to the body of the credit as no capital is reducing ≚ significant proportion of the credit is deferred until the end of the period which will need repaying should you decide to own the vehicle The ability to repay additional amounts in to agreement and have the interest recalculated, meaning that you could lower your monthly repayment amount Satisfactory quality rights under the Consumer Credit Act are provided, meaning the credit provider may be liable for putting things right providing the cash price was less than £30,000 Once you have paid a half of the total amount payable you are able to exercise your legal rights and voluntary terminate the finance agreement by handing the vehicle back to the finance company (maybe subject to fair wear and tear) You have the option of ownership of the vehicle at the end of the agreement Variable deposits and periods available, usually between 2 and 3 years III.Return – If your needs or requirements have changed you can hand the car back to the dealer with nothing more to pay (subject to mileage and condition. Some finance providers will allow this value to be refinanced at the prevailing interest rate. II.Retain Ownership – You may prefer to keep the vehicle, to do this you are required to pay the Optional Final Payment in full. If the vehicle is worth more than the Final Optional Payment, you can use the difference as a deposit I.Renew – you can part exchange your vehicle at a dealership and start over again. Your options at the end of the agreement Therefore, it is imperative that you ensure that you accurately predict your mileage over the term, as any additional mileage is subject to an excess mileage charge. It is important to note that due to market conditions your vehicle may not be worth more than the Guaranteed Minimum Future Value at the end of the agreement, thus affecting the deposit available to purchase you next vehicle and subsequent monthly repayments. Your repayments are based upon the price of your vehicle less any deposit and the Optional Final Payment, plus interest charges and any fees. Exceeding the agreed annual mileage will result in a pence per mile charge, as the higher the mileage the less the vehicle is worth. The final payment is calculated based upon your driving requirements and annual mileage. Meaning that you are paying the difference between the vehicles sale value and its minimum worth at the end of the period. ![]() Instead of purchasing the vehicle over equal monthly instalments an Optional Final Payment, sometimes called Guaranteed Minimum Future Value, is deferred until the end of the term. A Personal Contract Purchase is a variation of a hire purchase agreement which offers monthly payments that are lower than some traditional finance schemes by offsetting a larger repayment to the end of the agreement. Click here to find out more about a Personal Contract Purchase including important things you must consider before taking out an agreement like what happens if you exceed your agreed mileage allowance.Ī PCP is more suited for those that wish to enjoy the benefits of upgrading their vehicle every two or three years. Once all of the repayments, including the deferred payment and any fees are paid, the goods become your property. This may give the benefit of lower monthly repayments or a shorter period of repayment. a vehicle through a pre -agreed fixed term finance agreement with part of the cost deferred until the end of the agreement. What is Personal Contract Purchase (PCP)?Ī Personal Contract Purchase (PCP) is a method of obtaining goods e.g. ![]()
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