DIFFERENT TYPES OF VEHICLE FUNDING
There are many different types of options when it comes to financing a new vehicle, here are some of the funding options below, if there is anything you are unsure about, don’t hesitate to contact our sales team for any further information.
HIRE PURCHASE - HP
Hire Purchase (HP) is the traditional way to finance a car purchase. You pay off the entire price of the vehicle through a series of monthly payments. At the end of the contract period the vehicle becomes your property.
The monthly payment is determined by the amount of deposit paid, the period of the contract and the sale price of the vehicle.
HP is very similar to borrowing a sum of money from a bank and paying it back over a fixed period of time, with interest. Hire purchase is a type of secured loan which are often preferred over alternative (unsecured) loans because they allow a greater borrowing limit. The term "secured loan" means exactly that, a loan that the lender can secure against an asset (in this case, a car).
WANT TO LOWER YOUR MONTHLY PAYMENTS?
Consider financing the car over a longer contract period - perhaps a 60 month contract will make your car of choice more affordable.
The amount of deposit you are able to put down will dramatically effect your monthly payments. Higher deposit means lower payments.
Lease Purchase
The same benefits as Hire Purchase with the additional option to include a balloon payment to reduce monthly payments.
Reduced payments.
On balance sheet funding.
25% writing down allowance up to a maximum of £3000.00 per annum.
Ownership.
Option to dispose or upgrade the vehicle during the agreement.
Contract Hire What is Contract Hire? Contract Hire is an agreement to lease a vehicle (car or van) for a set time period (and mileage) at a fixed monthly cost. The monthly Contract Hire rental amount is based upon the original cost of the vehicle, the mileage that is to be covered and the Contract Hire rental period (for example 24 months). An allowance for depreciation is also factored in to the final Contract Hire monthly cost. Maintenance packages can often be included within a Contract Hire agreement but these are not obligatory. Such Contract Hire maintenance packages would typically provide cover for all car or van servicing within the period of the Contract Hire agreement. Contract Hire agreements are usually preferred by vat registered companies, sole traders and partnerships.
No depreciation risks. No disposal issues/costs. Off balance sheet funding. 100% vat recoverable if sole business use applies, 50% vat reclaimable if business/private use applies. Road fund licence is included for the term of the contract. Option to include maintenance for the contract term. What are the advantages of Contract Hire? Contract Hire offers many advantages, especially for vat registered companies who do not wish to show their vehicles as an asset on their balance sheet.
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price". HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Return the vehicle to the finance company. As long as you have not exceeded the agreed mileage, you will have nothing more to pay. Keep the vehicle by paying off or refinance the outstanding balloon payment or GFV. Trade-in your car for a new car. You can come back to Pilkington Finance and part exchange your vehicle for the next new vehicle. If the trade-in value is greater than the GFV, the difference can be used towards a deposit on the next agreement. Sell the vehicle privately and keep any profit over and above the GFV. WANT TO LOWER YOUR MONTHLY PAYMENT? Within a PCP quote there are some things you can do to lower your monthly payment.
Consider financing the car over a longer contract period - perhaps a 48 or 60 month contract will make your car of choice more affordable. The amount of deposit you are able to put down will dramatically effect your monthly payments. Higher deposit means lower payments. It is worth calculating your annual mileage accurately rather than guessing. If you only do 6000 miles per year but have left your annual mileage figure at 10000 miles, your balloon payment will be lower and you will be paying more unnecessarily.
No depreciation risks. No disposal issues/costs. Off balance sheet funding. 100% vat recoverable if sole business use applies, 50% vat reclaimable if business/private use applies. Road fund licence is included for the term of the contract. Option to include maintenance for the contract term. What are the advantages of Contract Hire? Contract Hire offers many advantages, especially for vat registered companies who do not wish to show their vehicles as an asset on their balance sheet.
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price". HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Return the vehicle to the finance company. As long as you have not exceeded the agreed mileage, you will have nothing more to pay. Keep the vehicle by paying off or refinance the outstanding balloon payment or GFV. Trade-in your car for a new car. You can come back to Pilkington Finance and part exchange your vehicle for the next new vehicle. If the trade-in value is greater than the GFV, the difference can be used towards a deposit on the next agreement. Sell the vehicle privately and keep any profit over and above the GFV. WANT TO LOWER YOUR MONTHLY PAYMENT? Within a PCP quote there are some things you can do to lower your monthly payment.
Consider financing the car over a longer contract period - perhaps a 48 or 60 month contract will make your car of choice more affordable. The amount of deposit you are able to put down will dramatically effect your monthly payments. Higher deposit means lower payments. It is worth calculating your annual mileage accurately rather than guessing. If you only do 6000 miles per year but have left your annual mileage figure at 10000 miles, your balloon payment will be lower and you will be paying more unnecessarily.
No depreciation risks. No disposal issues/costs. Off balance sheet funding. 100% vat recoverable if sole business use applies, 50% vat reclaimable if business/private use applies. Road fund licence is included for the term of the contract. Option to include maintenance for the contract term. What are the advantages of Contract Hire? Contract Hire offers many advantages, especially for vat registered companies who do not wish to show their vehicles as an asset on their balance sheet.
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price". HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Return the vehicle to the finance company. As long as you have not exceeded the agreed mileage, you will have nothing more to pay. Keep the vehicle by paying off or refinance the outstanding balloon payment or GFV. Trade-in your car for a new car. You can come back to Pilkington Finance and part exchange your vehicle for the next new vehicle. If the trade-in value is greater than the GFV, the difference can be used towards a deposit on the next agreement. Sell the vehicle privately and keep any profit over and above the GFV. WANT TO LOWER YOUR MONTHLY PAYMENT? Within a PCP quote there are some things you can do to lower your monthly payment.
Consider financing the car over a longer contract period - perhaps a 48 or 60 month contract will make your car of choice more affordable. The amount of deposit you are able to put down will dramatically effect your monthly payments. Higher deposit means lower payments. It is worth calculating your annual mileage accurately rather than guessing. If you only do 6000 miles per year but have left your annual mileage figure at 10000 miles, your balloon payment will be lower and you will be paying more unnecessarily.
No depreciation risks. No disposal issues/costs. Off balance sheet funding. 100% vat recoverable if sole business use applies, 50% vat reclaimable if business/private use applies. Road fund licence is included for the term of the contract. Option to include maintenance for the contract term. What are the advantages of Contract Hire? Contract Hire offers many advantages, especially for vat registered companies who do not wish to show their vehicles as an asset on their balance sheet.
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP
WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price".
HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Return the vehicle to the finance company. As long as you have not exceeded the agreed mileage, you will have nothing more to pay. Keep the vehicle by paying off or refinance the outstanding balloon payment or GFV. Trade-in your car for a new car. You can come back to Pilkington Finance and part exchange your vehicle for the next new vehicle. If the trade-in value is greater than the GFV, the difference can be used towards a deposit on the next agreement. Sell the vehicle privately and keep any profit over and above the GFV. WANT TO LOWER YOUR MONTHLY PAYMENT? Within a PCP quote there are some things you can do to lower your monthly payment.
Consider financing the car over a longer contract period - perhaps a 48 or 60 month contract will make your car of choice more affordable. The amount of deposit you are able to put down will dramatically effect your monthly payments. Higher deposit means lower payments. It is worth calculating your annual mileage accurately rather than guessing. If you only do 6000 miles per year but have left your annual mileage figure at 10000 miles, your balloon payment will be lower and you will be paying more unnecessarily.
Consider financing the car over a longer contract period - perhaps a 60 month contract will make your car of choice more affordable.
The amount of deposit you are able to put down will dramatically effect your monthly payments. Higher deposit means lower payments.
Lease Purchase
Reduced payments.
On balance sheet funding.
25% writing down allowance up to a maximum of £3000.00 per annum.
Ownership.
Option to dispose or upgrade the vehicle during the agreement.
Contract Hire What is Contract Hire? Contract Hire is an agreement to lease a vehicle (car or van) for a set time period (and mileage) at a fixed monthly cost. The monthly Contract Hire rental amount is based upon the original cost of the vehicle, the mileage that is to be covered and the Contract Hire rental period (for example 24 months). An allowance for depreciation is also factored in to the final Contract Hire monthly cost. Maintenance packages can often be included within a Contract Hire agreement but these are not obligatory. Such Contract Hire maintenance packages would typically provide cover for all car or van servicing within the period of the Contract Hire agreement. Contract Hire agreements are usually preferred by vat registered companies, sole traders and partnerships.
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price". HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price". HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price". HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
Contract Hire allows the company to reclaim 50% of the vat on cars and 100% of the vat on vans of the Contract Hire monthly payments and 100% of the vat on any maintenance package. There are also certain tax allowances that can be utilised with Contract Hire.
With Contract Hire you no longer have to worry about the residual value of the vehicle as this is all factored into the Contract Hire quote.
There is no large initial capital outlay with Contract Hire because as your payments are evenly spread out over an agreed period (detailed in your Contract Hire quote).
Contract Hire gives you the freedom to change your cars or vans on a regular basis thus allowing you to take advantage of the latest technological developments in fuel efficiency and safety.
Finally, Contract Hire gives you peace of mind with fixed cost motoring.
If you would like a Contract Hire quote, please use our unique free instant quote system above. Daily Contract Hire Daily Contract Hire operates in a very similar way to standard Contract Hire but the Contract Hire periods are typically much shorter – in most cases just up to 12 months.
We normally recommend Daily Contract Hire when a company has a fluctuating requirement for vehicles: maybe someone is on a very short term contract for example. Our free instant quote system does not cover Daily Contract Hire options, so for advice and further information please give our Contract Hire team a call. PERSONAL CONTRACT PURCHASE - PCP
WHAT IS PCP? Using a Personal Contract Purchase (PCP) plan the customer will make an initial payment, followed by a series of monthly payments and a final large, but optional payment, called a GFV. A PCP plan will enable the customer to purchase a new vehicle with lower monthly repayments by deferring a large amount of the total cost of the vehicle to the end of the contract - this amount is known as the Guaranteed Future Value (GFV), often referred to as the optional final balloon payment. The GFV is set by the finance company and is based on the chosen vehicle and the annual mileage stipulated by the customer. The annual mileage can be set between 6k and 30k per annum and will affect the figure given for the GFV. "With PCP your monthly payments cover the loss in value of the car over time - you're basically paying the monthly depreciation of the car plus the interest on the outstanding balance. At the end of the contract you have the option to buy the car at a previously set price".
HOW ARE THE MONTHLY PAYMENTS CALCULATED? The Guaranteed Future Value plus the customer's deposit is subtracted from the cash price of the vehicle and the monthly payments are based on the balance (plus interest on the balance and the GFV). At the end of the agreement the customer will have a choice of making a final lump sum payment in order to complete the agreement, or to simply return the car to the finance company without any further obligation. By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car. WHAT DO I DO AT THE END OF THE CONTRACT? At the end of the contract you have four options:
