Q How does new car or bike finance work

There are many types of new car or bike finance though personal contract purchase (PCP), personal contract hire (PCH), and hire purchase (HP) are the most common.

Personal contract purchase - You pay an initial deposit (typically 10% of the vehicle's value) followed by monthly instalments on the amount you borrowed. At the end of the agreement,  you can choose to own the vehicle by making the optional final payment, or hand the vehicle back to the finance company with nothing further to pay (provided it's within good condition and within the agreed mileage). 

Personal contract hire - You pay an initial rental followed by monthly payments for a set period, which is confirmed at the start of the agreement. At the end, you return the vehicle to the finance company with nothing further to pay (provided it's within good condition and within the agreed mileage). You do not have the option to purchase the car.

Hire purchase - You pay an initial deposit, then pay off the remaining loan balance in monthly instalments. Once fully paid, you own the vehicle. There are no mileage limits. 

Find out more about payment options for your new car or bike or contact us today.