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We explain the differences between the main types of new & used car finance: PCP finance, HP (hire purchase) and car leasing.
If you need to replace your car or other vehicle then two popular forms of car finance are hire purchase (HP), and personal contract purchase (PCP, a form of leasing) . Under these options the finance company owns the car while you make the regular payments. So, what’s the difference between them?
With HP you are working to towards final ownership of the car. With PCP you can delay the decision to own the car until the very end. In fact with PCP there are 3 final outcomes to choose from:
– Hand the car back with no further costs
– Part exchange the car as part of a new PCP deal
– Purchase the car outright with a final “balloon payment”
If you have no desire to ever own the car then a car lease deal (either a PCP or personal contract hire PCH arrangement) could be the most cost effective way of getting a new car. Also keep in mind that choosing a car brand that depreciates more slowly could also help to keep your monthly costs down – after all with a long term rental /car lease what you’re really paying for is the depreciation of the car plus some interest.
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▶️ ON OUR WEBSITE & “MONEY MATTERS” BLOG
– Car Finance: http://www.solution-loans.co.uk/car-f…
– How to Buy a Used Car using car finance: http://www.solution-loans.co.uk/blog/…
– 6 reasons why people use car finance: http://www.solution-loans.co.uk/blog/…
– Why young drivers are leasing cars: http://www.solution-loans.co.uk/blog/…
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▶️ ABOUT SOLUTION-LOANS.CO.UK
Solution Loans is a leading UK online credit broker. We started in 2005 with the express mission of providing people with information and online tools to help them make smarter financial decisions.
We’re fully authorised and regulated by the Financial Conduct Authority (FCA). Our credit broking service is FREE to use; there are NO UPFRONT FEES. In most situations the deals you will get will be AS GOOD AS GOING DIRECT, although you should also have more choice than if you went direct.
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