Finance Options at Des Winks Limited

What is Personal Contract Purchase (PCP)?

Personal Contract Purchase (PCP) is one of our most popular finance products, and is ideal for those who want a flexible contract that gives you the option of buying your vehicle or upgrading every few years. Instead of paying off the entire value of the vehicle over the term of the agreement, you will pay off its depreciation value, which is the difference between its sale price and the Guaranteed Future Value that is calculated at the start of the contract.

How does PCP actually work?

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Once you have chosen your vehicle, you will then agree your annual mileage and decide on the agreement term – typically 18 to 48 months – with one of our Business Managers. We’ll then determine what the car’s Guaranteed Minimum Future Value (GMFV) will be at the end of the agreement, and tailor a package with a deposit and fixed monthly amount that suits your budget.

At the end of your agreement you have three options: Return the car to us, trade it in for another vehicle of your choice, or pay the optional final payment to own the car outright.

For a quotation, help or advice, contact one of our Business Managers today.

What are the advantages for PCP?

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  • Paying off the vehicle’s depreciation value means your monthly instalments are typically lower than with other finance plans, making them more affordable.
  • You can upgrade your vehicle every few years without the hassle of selling your old one.
  • You have the option of handing back the car without any further commitments.
  • If the car is worth more than its agreed Guaranteed Future Value, you can use that equity towards a deposit on a new car.

What should you consider when opting for PCP?

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  • You don’t own the vehicle while you’re making the repayments – the only way to own it outright is to make the final balloon payment (the Guaranteed Future Value) at the end of the contract.
  • You will need to agree a mileage allowance, and if you exceed this, you’ll incur extra charges.
  • You won’t be able to sell the car without settling the finance first.
  • Despite not owning it, you’re still responsible for the car’s insurance, road tax and maintenance while you are the registered keeper.

Can I settle my PCP agreement early?

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​Yes, it’s possible to settle your agreement early. Simply ask your finance provider for a settlement figure. It’s worth noting that you will have to pay off the difference between what your car is worth and what you still owe, and this could result in negative equity. If, however, your car is worth more at the end of your term than the Guaranteed Future Value, you will have some positive equity to contribute towards your next vehicle.

What is Hire Purchase (HP)?

Hire Purchase is a straightforward way to finance a new or used car, and is ideal for those who want to own their vehicle outright. After paying an initial deposit – usually around 10% of the vehicle’s value, the balance is paid off in fixed monthly instalments over a period of 12-60 months. At the end of the agreement, you pay an ‘option to purchase’ fee, normally of £100-200, which makes you the car’s owner.

To obtain a quotation, or for help and advice, contact one of our Business Managers today. 

What are the advantages of HP?

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  • Unlike PCP, there’s no mileage allowance that you need to adhere to, so you can travel as far as you like without worrying about extra charges.
  • You can spread the cost of your vehicle over a period that suits you, meaning you may be able to afford more than you think.
  • Once you’ve paid your final monthly instalment and option to purchase fee, you have full ownership of the car.

What should you consider when opting for HP?

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  • You’re paying off the vehicle’s full value, which means monthly payments may be higher than with other finance options like PCP.
  • You won’t own the car until you’ve made all the repayments, so if you wish to sell it early, you’ll need to settle the finance first.
  • During the course of the contract and beyond you’ll need insure, tax and maintain the car.

Can I settle my HP agreement early?

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Yes – simply request the settlement figure from your finance provider. Most offer the option to end the agreement early once you have got two-thirds of the way through it. You’ll pay a settlement fee, which covers the cost of any remaining unpaid instalments and interest payments. Once this is paid, you’ll take full ownership of the car early.