Personal Finance Explained

When confronted with the various vehicle finance options available, consumers can find this a very complicated subject to understand.  The following information has been provided for your assistance.  Our Sales Managers are available to talk to you about all of the following types of finance at your local Northern Motors branch, so please contact us now for more information.

 

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Lease Purchase

 

The customer acquires the vehicle when all the payments, including an option to purchase payment, have been made.  Part of the capital cost of the vehicle payment may be deferred into a 'balloon' or residual payment at the end of the agreement, which equates to the anticipated value of the vehicle at the end of the agreed loan period.

 

Highlights:

  • Low deposit (usually equivalent to 3 monthly payments or 5-10% of the capital cost of the vehicle)
  • No VAT involved
  • Writing down tax allowances apply
  • 18-48 month contracts
  • Any vehicle, new or used
  • Eventual ownership
  • No mileage restrictions (although the purchaser will ultimately pay for the full depreciation of the vehicle while in his possession)

 

Personal Contracts / PCP

 

For private individuals who want a hassle-free and cost effective way to finance and maintain a vehicle.  The individual can choose a full maintenance or non-maintenance option.  A residual payment is incorporated into the contract and is payable at the end of the primary contract period, should the individual wish to acquire ownership of the vehicle.  Alternatively, the vehicle can be returned to the finance company at this point.

 

Highlights:

 

  • Low deposit (usually equivalent to 3 monthly payments)
  • Mileage restrictions apply
  • 18-60 month contracts
  • Any vehicle, new or used
  • Breakdown cover included for full contract
  • Optional eventual ownership
  • Allows a private individual to benefit from the fleet buying power of the leasing company