Finance at Prestons in Writtle, Chelmsford
There are multiple ways to fund a car, from outright cash purchase to Personal Loans, but it’s important to understand what types of funding options you the consumer have available to you. In order for you to make an informed decision of which route if best for you…
1. Cash purchase is where you pay for the car with your own cash assets, i.e physical paper money or bank transfer so the final price of the vehicle is likely to be important to you, based on the cash amount you have available at the time. Cash purchases historically are one of the most popular ways to fund your new vehicle, but it’s a method becoming less popular as other options are more readily available now.
2. Personal loan can be used by you, car buyers, will facilitate the loan outside of the car dealership, usually with their bank or building society. A personal loan is where you borrow a specific amount of money for an agreed payment term. You then make regular monthly payments to your bank until the full amount of paid back. You will use these funds to purchase the car outright, like a cash purchase, but it’s an option that is less limiting to the amount you can afford, as you will usually borrow based on the purchase price.
3. A hire purchase finance agreement helps you budget by offering a fixed interest rate and monthly payments, so you know what you will pay each month. If you have a specific monthly payment in mind to meet your affordability, you can adjust the deposit and length of agreement accordingly during your application. This type of finance option usually allows you to drive a newer car with better specification. At the end of a hire purchase, you will own the vehicle outright so you can then use the car as collateral towards a new vehicle or keep it for a little longer if you wish. It’s a bit like a mortgage, you have it over a period of time and you pay back the balance in full over that period of time.
4. Personal Contract Purchase, If you want lower monthly payments, a personal contract purchase might be the ideal finance option for you. With a PCP deal, you delay part of the payment until the end of the agreement, which keeps your monthly payments as low as possible. The deposit, monthly payment and annual mileage can all be adjusted to meet your needs. The final payment is usually known as a balloon payment and is calculated using industry data. The amount is often adjusted down so you have equity in the vehicle that you can put towards your next purchase. You can then either pay the final amount and keep the vehicle or part exchange towards a different vehicle and continue with monthly payments. The plus point of a PCP is that your not paying the entire loan back in a monthly payment, you know from day one what the balloon payment is and therefore you can budget monies to pay it off at the end of the term, this figure will not change when you enter the agreement. You can part exchange and that balloon payment becomes what you owe, if the vehicle is worth more. That difference is what you can put towards another car.
Finance Application Terms and Conditions
By completing the application for vehicle finance below, you give us, Prestons Garages Ltd, the authority to request your credit history from credit reference agencies ("CRAs") and that you agree to a full ("hard") credit search on your credit report. This hard search includes information like your credit score, credit report and data related to them, such as credit providers, county court judgments ("CCJs") and reasons for changes to your score or report. Hard searches are visible to third parties. When you submit the application, a hard credit search will be performed and your eligibility for vehicle finance will be considered by our carefully selected panel of lenders. Each has their own acceptance criteria and will consider affordability elements that a credit search may not. Lenders will assess your ability to repay the finance provided, now and in the future, including in the event of a change in circumstances or the general market, such as an interest rate change. Before proceeding, please note that multiple hard credit searches in close proximity to each other can detrimentally impact your credit score. Lenders and credit scoring models consider how many hard credit searches you have on your credit reports. This is because applications for new credit increase the risk a borrower poses to lenders. Be mindful of submitting multiple finance applications in a short window of time. We, Prestons Garages Ltd, are a credit broker and not a lender. We can introduce you to a limited number of lenders and their finance products. We are not an independent financial advisor. We will provide details of products available, but no advice or recommendation will be made. You must decide whether the finance product is right for you. We do not charge you a fee for our services. Whichever lender we introduce you to, we will typically receive commission from them either a fixed fee or a fixed percentage of the amount you borrow. For your reassurance, all of the lenders we work with could pay commission at different rates, but the commission we receive does not influence the interest rate you will pay. Our aim is to secure finance for you at the lowest interest rate you are eligible for from our panel of lenders. If you ask us what the amount of commission is, we will tell you in good time before the Finance agreement is executed.