At Thame Cars we believe that your experience as our customer should be simple, convenient, safe and happy. This extends to our finance services, because you'll hardly feel safe or happy if you're blinded with complicated figures! So here's a no-nonsense, jargon-free guide to financing your nearly new car.
What is Finance and why would I want it?
Most of us would admit that we've looked around for our next new car, but sadly the bank balance can only be stretched so far! So take a look at financing a nearly new car, you will get the same benefits as financing a new car, without the burden of the first years depreciation. Finance is a loan taken out against your car, which enables you to extend your budget and not dip into those rainy day funds or that family holiday you’ve been saving for. You can often borrow the whole value of the car, or pay a deposit towards it and finance the rest. You then pay monthly payments towards the remaining balance.
What kinds of Finance are there?
There are loads of different ways of financing your car, including Hire Purchase (HP), Personal Contract Plan (PCP), Leasing and Contract Hire. They each have different benefits depending on your budget, deposit, and whether you're a private or business buyer. In our spirit of keeping things simple, we offer Hire Purchase and Personal Contract Plans which can enable almost anyone to get into one of our nearly new Ford or Vauxhall cars. Let me take a moment to break them down:
Hire Purchase
Hire Purchase, or HP for short, is the simplest form of finance. You pay a set amount per month in equal payments until it's all paid off, then the car is all yours. You can choose either to pay a deposit or borrow the whole amount. Most people set the term of their hire purchase agreement at between two and five years. There are no mileage limits, and you can always change cars during the agreement if you want to, as long as the HP gets paid off.
Personal Contract Plan
Personal Contract Plans (PCPs) are slightly different to HP. On a PCP you leave a portion of the amount borrowed to the end of the agreement, which is known as a "balloon" payment or a Guaranteed Minimum Future Value (GFMV). When you get to the end, you have three choices. You can either pay the balloon payment and keep the car, part-exchange it towards something else or alternatively you can re-finance the balloon payment. If it's worth less than the balloon, you can hand the car back to the finance company. All of these options will depend on your pre-agreed mileage allowance as well as the condition.
Still with me? Here's a very rough example. You can use our finance calculator for any of our vehicles which can help you understand your options fully. For example, Let’s say you like the Ford Fiesta ecoboost currently priced at £10,799. With a PCP plan you could put down a £2000 deposit and pay £185.56 a month for 36 months. This is currently based on a 10,000 mile estimate but you can of course change this is you do more or less and this will adjust your monthly payments *(See below for our FCA) . Some people find PCPs scary because of the thought of the balloon payment at the end. The reality is most people change cars regularly, so you'll probably never pay it. More people are now choosing PCPs because the balloon payment means that monthly payments are lower than HP, allowing you to have a shorter term, or perhaps a more expensive car. PCPs are great for nearly new cars over older cars, because the balloon is usually more generous, meaning a lower monthly payment. You do have to set a mileage limit on a PCP, which affects the final value.
How can Thame Cars help?
At Thame Cars we can provide you with a finance quote tailored to your budget and circumstances, and the car you want. We don't charge fees for credit searches or applications. You can get an instant decision, and believe it or not, online approval from our lender means you could be out on the open road in your nearly new Ford or Vauxhall within an hour! You'll benefit from our transparent, easy-to-understand approach - and we like to keep it simple!
Hopefully this guide has cleared some of the mist around car finance, but if you have any questions, feel free to visit our Finance page here, or get in touch - we're always happy to help.
*FCA - Thame Service Station t/a ThameCars is an appointed representative of ITC compliance limited which is authorised and regulated by the financial conduct authority (their registration number is 313486). Permitted activities include advising on and arranging general insurance contracts and acting as a credit broker not a lender
