Buying a new used car will be one of your biggest expenses, whether planned or unplanned. At Newbarn Car Sales we understand the importance of getting your purchase right, and getting the finance. We work with a range of established companies
What is car finance?
Car finance is a loan taken out to cover the cost of a new or used vehicle. It can be used to help make buying a used car more affordable and is the method most people use when buying a used car at Newbarn Car Sales.
There are lots of different finance options you can use when buying a new or used car, however the three main types of finance deals that you’ll find are:
What is hire purchase car finance?
A Hire Purchase loan, often referred to as HP, is a loan secured against the vehicle you are purchasing. This is a great option if you want to spread out the cost of the vehicle you are purchasing. Typically, a HP car finance deal will require a deposit and the rest of the balance will be paid in instalments across an agreed time frame, this can vary but tends to be across three years. The higher deposit you can pay, the lower your monthly repayments will be. Once you’ve paid your final instalment, you own the car outright. The drawback of Hire Purchase car finance is that the monthly repayments can be much higher compared to other car finance options, so may not be suitable for those with a lower budget.
What is PCP car finance?
Personal Contract Purchase car finance, or PCP as it is widely known, works similarly to HP finance in that you pay an upfront deposit followed by monthly payments. However, with PCP deals at the end of the agreed period, usually three years, there will be what is known as a balloon payment - which is the rest of the balance. You can either choose to pay off the balloon payment, which will mean you then take full ownership of the vehicle. However, you can opt to return the vehicle and use any residual value on a deal with your next vehicle. PCP car finance deals are a great option for those who like to change their car regularly, but don’t want to pay a big deposit every time. It’s also a great option for those who have a smaller budget to work with because of those smaller monthly repayments.
What is personal leasing (contract hire)?
If you are someone who likes to change their vehicle up every few years, then a Personal Leasing, or contract hire, finance option is likely the best option for you. Contract hire deals are similar to PCP car finance deals, however with a contract hire deal there is no option to buy the car outright at the end of the deal. With contract hire you pay an agreed monthly fee for an agreed period, at the end of this period you can swap this vehicle for a newer one but you will never have the option to own it.
Get car finance today
Get in touch with a member of our friendly team to find out what your options are, call us on 01243 841200. Alternatively fill out the ‘Apply for finance’ form below.
Why Finance Through a Dealership?
What is Hire Purchase?
What is Personal Contract Purchase?
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