Buying A Car With A Personal Contract Purchase Loan

Buying a​ Car With a​ Personal Contract Purchase Loan
If you​ are looking to​ buy a​ car but are unsure whether or​ not a​ new car is​ worthwhile,​ then you​ should consider the​ benefits of​ buying a​ car with a​ personal contract purchase loan .​
Using a​ personal contract purchase loan can reduce the​ amount of​ depreciation you​ suffer,​ and help you​ to​ get the​ car you​ want .​
Here is​ some more information about buying a​ car with a​ personal contract purchase loan.
What is​ a​ PCP?
A PCP,​ or​ personal contract purchase loan,​ is​ a​ personal contract for private individuals .​
It allows you​ to​ set a​ contract term with monthly payments for your new car .​
At the​ end of​ the​ term you​ can either purchase the​ vehicle fully or​ give it​ back to​ the​ contact provider.
Costs of​ a​ PCP
The costs of​ a​ PCP depend on​ the​ car you​ are buying,​ and how much deposit you​ can afford to​ put down .​
It also depends on​ the​ length of​ the​ contract,​ as​ well as​ other factors like maintenance requirements .​
However,​ the​ length of​ the​ agreement will usually last from 24-42 months,​ during which time you​ pay a​ monthly cost as​ a​ ‘rental' of​ the​ vehicle .​
Guaranteed future value
One advantage of​ a​ PCP is​ that you​ will get a​ minimum guaranteed future value agreed,​ so that you​ know how much you​ will have to​ pay at​ the​ end of​ the​ loan term to​ buy the​ car outright .​
You can either pay the​ guaranteed value and own the​ car,​ hand it​ back without any payments,​ or​ use the​ guaranteed value towards another new car.
Cheaper than many other methods
Apart from flexibility,​ the​ main advantage of​ a​ PCP is​ that you​ have fixed monthly payments that are likely to​ be lower than other forms of​ auto finance .​
Also,​ if​ you​ get a​ PCP with maintenance included you​ will not have to​ worry about large repair costs like you​ might with a​ used car .​
Also,​ depreciation is​ lower because you​ have a​ guaranteed future value.
Losing the​ car
Perhaps the​ biggest disadvantage of​ a​ PCP is​ that during the​ contract term you​ do not actually own the​ car .​
You are simply leasing it​ from the​ provider,​ so if​ you​ should fail to​ make the​ payments the​ car can be taken away from you​ .​
Before taking out a​ PCP,​ make sure you​ can afford the​ repayments so that you​ will be able to​ keep the​ car you​ want.
Cheaper than a​ loan
Although PCP means you​ don't own the​ car during the​ contract term,​ it​ is​ much cheaper than a​ loan for financing a​ car .​
Even if​ you​ get a​ very low rate,​ you​ will pay back more and the​ depreciation will be higher .​
If you​ are looking to​ buy a​ car and you​ don't want to​ pay outright,​ then go for a​ PCP.
Buying A Car With A Personal Contract Purchase Loan Buying A Car With A Personal Contract Purchase Loan Reviewed by Henda Yesti on August 06, 2018 Rating: 5

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