Hire Purchase enables you to acquire an asset while paying for it in instalments over an agreed timescale – the term. At the end of the term, you have the option to purchase the asset outright.
Far more flexible than a conventional loan, Hire Purchase lets you spread the cost of your investment over the life of the asset, making it easier to budget. Hire Purchase is particularly suitable for acquiring vehicles, machinery, construction and commercial equipment with a resell value.
Lease Purchase (also known as Hire Purchase with Balloon) enables you to acquire an asset while paying for it in instalments over an agreed timescale – the term. However, your monthly repayments are reduced by deferring a proportion of your balance, a balloon payment, to the end of your finance agreement.
Far more flexible than a conventional loan, Lease Purchase lets you spread the cost of your investment over the life of the asset, making it easier to budget. Lease Purchase is particularly suitable for acquiring vehicles, machinery, construction and commercial equipment with a resell value.
At the end of the term you have several options:
1- Pay the balloon amount and option to purchase fee to own the vehicle
2- Refinance the Balloon amount to continue to finance the vehicle
3- Part Exchange the vehicle subject to settlement of your existing agreement
4- Sell the vehicle ensuring the finance amount can be repaid
Our Finance Lease arrangements lets you use the equipment you need without having to buy it outright.
You will pay a rental to the funder for the use of the Asset. The rental period (the primary lease term) is flexible and can be tailored to your usage needs and cash flow. During this period, you will pay the funder the full cost of the asset, including interest
Then, when you reach the end of the primary lease term you can choose to:
• Continue to use the asset by entering a secondary rental period
• Sell the asset and keep a portion of the income from the sale
• Return the asset
Personal Contract Purchase (PCP)
Personal Contract Purchase (PCP) is becoming an increasingly popular finance solution for private individuals who are purchasing a vehicle, it offers the preference of fixed lower monthly repayments with the flexibility to defer a proportion of the payment of the vehicle until the end of the agreement, this is known as your final ‘balloon’ payment.
At the beginning of the agreement you simply choose your initial deposit, the length of term typically between 24–48 months and your expected annual mileage.
The Guaranteed Minimum Future Value (GMFV) of your vehicle is then calculated based on the information you provide and the total GMFV becomes your final ‘balloon’ payment.
The higher your GMFV the lower your monthly payments and the larger your balloon payment at the end of your agreement if you wish to own your vehicle outright.
The lower your GMFV the higher your monthly payment and the smaller your balloon payment at the end of your agreement if you wish to own your vehicle outright.
The monthly repayments are calculated by deducting your deposit and GMFV from the purchase price of your vehicle, you pay the remaining balance and interest payable over an equal number of monthly repayments throughout the term of your agreement.
At the end of your PCP agreement you then have a few options.
Option 1 – Part-exchange your vehicle—use any equity above the Guaranteed Minimum Future Value as an initial deposit on your next purchase.
Option 2 -Keep your vehicle—simply pay the Guaranteed Minimum Future Value to retain ownership.
Option 3 – Refinance the final balloon payment.
Option 4 -Return your vehicle and have nothing further to pay, subject to vehicle condition and within the agreed mileage terms. (Subject to terms and conditions)
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