Our Finance Options

What is hire purchase?

Hire purchase (HP) is our most common type of personal finance. A HP deal allows you to purchase a car in instalments over a set period.

How does hire purchase work?

You’ll typically pay a deposit upfront (although you don’t have to), then a series of fixed payments over a fixed period (anywhere from 12-60 months) including interest. After that, the car is yours – fully bought and paid for.

What are the benefits of hire purchase?

• It enables you to afford to purchase a car you wouldn’t be able to buy
• You’ll own the car at the end of the deal
• Payments are typically fixed for the duration of the deal, with no large payment required at the end.
• Interest rates are typically fixed for the duration of the deal, too.
• Mileage limits don’t apply as they do with other finance types.

Who is hire purchase best for?

A HP deal might be best for you if you definitely want to own the car at the end of the deal but it’s one you can’t afford to purchase outright. If you don’t have a high credit score, it might also be easier to get a HP deal than another finance deal, as the car is used as collateral for the loan.

What is PCP?

Personal contract purchase (PCP) is one of the most popular methods of financing a car. It’s a flexible option that essentially acts as a loan to help you buy the car you want, but you have the choice of buying the car at the end of the deal.

How does PCP finance work?

PCP deals can be broken down into three phases: the deposit, monthly payments and final balloon payment. You’ll typically pay a deposit upfront (again, you can opt for a zero deposit deal that’ll carry higher monthly payments), then a series of fixed monthly payments for a set period.

Where PCP differs from HP is at the end of the deal, where you’ll have an optional balloon payment due based on a guaranteed future value (GFV) figure that’s agreed at the start of your deal. You have the option to pay this and then you’ll own the car, or forego the balloon payment and either trade the car in against a new deal or give it back.

What are the benefits of PCP?

• You’ll get lower monthly payments on a fixed basis.
• You don’t have to buy the car at the end of the deal, meaning no depreciation concerns.
• At the end of the deal, if you don’t want to buy, you can trade in the car as a part-ex against a new deal.
• You can change your car regularly through PCP deals, meaning you can switch to a newer, higher-spec car every few years.

Who is a PCP deal best for?

If you’re looking for lower monthly payments and want flexibility in the car you’re driving, PCP offers a manageable way to move between car deals. Plus, the option to buy is always there if you want it.

What is PCH?

Personal contract hire (PCH) is a leasing deal. You pay an initial rental, fixed monthly payments over a set period, and then give the car back at the end of the lease.

How does PCH work?

PCH is best thought of as a long-term rental. You’ll typically put up an initial payment (again, no initial payment options are available in exchange for higher monthly rates), then fixed monthly payments for a set period. Once the deal is done, you give back the car.

What are the benefits of PCH?

• Leasing usually offers cheaper monthly payments than other types of finance, so you can drive a more expensive car.
• You never own the car, so there are no depreciation and resale worries.
• There’s nothing to pay at the end of the deal (assuming you haven’t exceeded agreed mileage or wear or tear restrictions).
• You can add a maintenance package to your deal, meaning servicing, MOTs and tyres are taken care of.
• No initial payment and bad credit options are available.

Who is PCH best for?

If you’re looking for the best deal on driving a car you might not otherwise be able to afford, PCH is for you. Bear in mind you’ll never own the car and will have mileage and condition obligations to stick to in your contract, but you’ll also have the flexibility to walk away at the end of the deal and move onto a new vehicle.

What is lease purchase?

Lease purchase, sometimes known as conditional sale, is a less common form of purchasing agreement than HP or PCP. With a lease purchase, you agree to purchase the car at the end of the agreement, but payment structures are laid out differently to what you’d typically get in a hire purchase deal.

How does lease purchase work?

Like PCP, lease purchase can be broken down into three steps: initial deposit, monthly payments and a final balloon payment. The difference is you’re obligated to make the final balloon payment, after which the car will be yours for good. How does this differ from a hire purchase deal? The payments tend to be fixed across the board with HP, while you’ll typically pay lower monthlies but a larger final payment with lease purchase.

What are the benefits of lease purchase?

• Your monthly payments will typically be lower than other finance types resulting in purchase, like hire purchase.
• You’ll own the vehicle at the end of the deal.
• The upfront deposit tends to be lower than with other finance options.
• Contract terms are flexible.

Who is lease purchase best for?

If you want to own the car at the end of the agreement but make lower monthly payments along the way, lease purchase could be for you. Just bear in mind that you’ll need to have the final balloon payment saved up and ready for the end of the deal.

What is business contract hire?

Business contract hire (BCH) is a business lease option that’s highly popular with VAT-registered companies.

How does business contract hire work?

BCH is a long-term rental agreement where the company pays fixed monthly rates for a set period (typically 24-48 months). The vehicle remains the property of the finance provider and is returned at the end of the agreement. Not owning the vehicle allows it to remain “off the books”, which offers several financial and administrative benefits to the business leasing it.

What are the benefits of business contract hire?

• Businesses can lease with limited financial risk and administrative responsibility.
• VAT-registered businesses can claim back VAT on rental and maintenance elements. BCH can be up to 100% tax-deductible depending on the cost of the vehicle.
• There are no worries about depreciation or resale.
• You have the flexibility to change vehicles every few years.
• Roadside assistance, maintenance and relief vehicle provisions can be added to the fixed monthly rental.
• Road tax is included.

Who is business contract hire best for?

If you’re looking to add to your fleet flexibly with minimum outlay and maximum control of costs, a BCH deal will allow you to stay focused on core activities without incurring any financial risk or administrative weight.

What is a business finance lease?

A business finance lease is a long-term rental agreement that places the vehicle on your books. It’s another VAT-beneficial option that offers different ways to pay throughout the lease, typically with low upfront and monthly payments.

How does a finance lease work?

With a finance lease, you agree to handle the administration of the vehicle and have it as an asset on your balance sheet. The deal works like a typical long-term rental arrangement where you pay a set fee for a set amount of time. You can choose to pay the entire cost over the course of the agreed lease period (plus interest) or pay lower monthly instalments during the lease period with a balloon period due at the end.

At the end of the lease, you have the option to find a buyer, return the asset to the lease company for resale or pay the outstanding balloon payment and continue to operate the vehicle under a peppercorn agreement.

What are the benefits of a finance lease?

• You typically won’t need a large down payment, meaning you can get on the road for minimal outlay.
• Monthly payments are also usually quite low.
• You’ll pay fixed payments for the duration of the lease.
• VAT-registered businesses can claim a variety of VAT back, including up to 100% on commercial vehicles and maintenance packages.
• There are often flexible repayment options, with the opportunity to defer monthly payments.
• You may be eligible to keep a portion of any profit generated by the resale of the vehicle at the end of the contract.

Who is business finance leasing best for?

Finance leasing is ideal for companies looking to bolster their fleet options with minimal outlay in scenarios where contract hire isn’t suitable. Just make sure you’re clear on what you want to do at the end of the contract which, if you manage the vehicle correctly, can be profitable for you.

What is contract purchase?

Business contract purchase is a form of leasing agreement for VAT-registered companies that carries a purchase option at the end.

How does contract purchase work?

You’ll pay a deposit upfront, followed by a series of fixed monthly payments for a set period – which aren’t subject to VAT. At the end of the deal, you have the option to purchase the vehicle via balloon payment, assuming the conditions of the lease agreement have been met. The final balloon payment is guaranteed at the start of the agreement by the finance company, so you have a known fixed amount waiting as a purchase option at the end of the contract.

What are the benefits of contract purchase?

• You’ll typically pay a low initial cost.
• You have the option for ownership at the end of the contract.
• Your monthly payments are fixed.
• There’s no residual risk to you.
• Maintenance and other services are available to add to the deal.
• You can get flexible terms to meet your needs, including variable contract duration and mileage restrictions.
• There are a variety of tax and VAT benefits to take advantage of.

Who is contract purchase best for?

If your business is looking to operate high-value vehicles without the worry of depreciation and other residual risk, a business contract purchase gives you the flexibility of the option to own your fleet at the end of the agreement without the substantial upfront costs of buying outright – or indeed the obligation to buy.

What is lease purchase?

A business lease purchase is solely a finance package. You’ll own the vehicle from the start of the agreement, with the obligation to buy at the end of the contract.

How does lease purchase work?

Lease purchase offers no additional services other than the finance package. You’ll pay an initial deposit followed by a series of fixed monthly payments for a set period. All costs are determined by the vehicle’s value, the contract length and the estimated residual value at the end of the deal. As you take on the residual risk, you’ll get a better deal on a vehicle that depreciates slowly.

At the end of the agreement, you’ll have a final balloon payment. You’re obligated to make this payment and purchase the vehicle.

What are the benefits of lease purchase?

• You’ll own the vehicle at the end of the deal, with your company retaining it as an asset.
• It takes the sting out of the initial purchase, knocking down upfront costs and monthly payments.
• The monthly repayments are not subject to VAT.
• The vehicle can be placed on your balance sheet, meaning its value can be written down against taxable profits.
• The vehicle is registered to your company.

Who is lease purchase best for?

Business lease purchase offers less flexibility than options like contract hire and finance lease but is built for businesses that want eventual ownership of the vehicle without spending the money upfront. Through lease purchase, you can commit to buying a vehicle while retaining capital to spend elsewhere.