For most of our customers, once they have chosen which car to buy, how to finance their vehicle is the next most important question to be answered. At New Broad Street Motors we have experts onsite to help you choose the best solution to suit your personal circumstances.
Personal Contract Purchase (PCP)
If you are buying a car, this is the most popular way to fund it. Compared to more conventional funding packages, with one of our PCPs, you can buy your next car with a lower initial deposit and ongoing monthly payments. This is achieved by deferring part of the total purchase cost, known as the Guaranteed Future Value (GFV), to the end of the contract. Your deposit and the agreed GFV are subtracted from the price of the vehicle and, together with the cost of the money on the balance, form the basis of your monthly repayments. Since you only repay the difference between the GFV and the cash price, you are effectively just funding the vehicle depreciation.
When you reach the contract end date, you can either:
- Sell the vehicle privately and, having repaid the GFV, keep any profit
- Keep the vehicle and simply re-finance or pay-off the GFV
- Part-exchange your vehicle with us for a new one and if the trade-in value exceeds the GFV, use the excess to offset the deposit on your next car
- As long as you have not exceeded the agreed mileage, simply return your car to the finance company, with nothing more to pay.
Hire Purchase (HP)
Because this type of loan is secured against your car, you may be offered a higher borrowing limit, which is often preferred. Similar to borrowing from your bank and paying back the initial sum plus interest, because it is a ‘secured loan’, it is only available through finance-company approved dealerships, of which we are one.
As with Personal Contract Purchase, by deferring part of the total cost – known as the Residual Value (RV) - to the end of the contract, lower monthly repayments are possible. You will be responsible for settling the final payment either by cash, part-exchange or a new finance agreement. Repayment periods vary over two, three or four years, with your having previously selected a realistic anticipated annual mileage, thus enabling the RV to be agreed. At the end of the contract you have the same as the first three PCP options listed above.