When it comes to choosing a car, it isn’t always a simple process. There is much to consider. What do you require from your car and therefore what car should you choose? Then you have to decide how you acquire the car? Do you go out and find a finance deal somewhere else?
You can get them together. You choose the car you want and get the finance agreement that best suits at the same time from Hippo Motor Finance. You have three finance options to decide from after you have picked your car: Personal Contract Purchase, Hire Purchase, and Lease Purchase.
Choosing your car
Many finance lenders don’t supply cars. They ask you to find a car and then come back and get the finance for it. With Hippo Motor Finance we supply both a car and a finance package together. This can work in two ways.
If you know the exact car you want, enquire with us and tell us what you are looking for. If we do not have it in stock, we can easily source it. In fact, we can source any make or model from 2011 onwards.
For those of you who don’t know the exact car you want, we can help make the process simple. If you know your budget, that makes the process much easier. By knowing your budget, we know what cars we have left to play with. From that moment, we will work with you and discuss what your needs are for the car. How much space do you need and is fuel efficiency a priority for you or is four-wheel drive a requirement?
Picking the finance option for you
When it comes to getting a car and finance package together, choosing the car can be the easy part. There are three forms of car finance available and they are all designed to suit your needs and desires. There is Personal Contract Purchase (PCP), Hire Purchase (HP) and Lease Purchase (LP). Each one offers something different and some are more flexible than others.
Personal Contract Purchase
PCP deals offer you the most flexibility when it comes to deciding what to do with your car when the finance agreement ends. It works by you putting down a deposit, followed by a series of monthly payments and then deciding what to do at the end.
Your monthly payments are used to pay off the depreciation of value on the car over the period. They are calculated by the annual mileage allowance, (where you decide how many miles you aim to drive a year), the length of the agreement (most PCP deals are between 24-48 months long) and how much of a deposit you put down (the larger the deposit, the lower your monthly payments).
When a PCP deal comes to the end, you have three options. You can pay off the Guaranteed Minimum Future Value or balloon payment and take ownership of the vehicle. The GMFV is decided at the start of your agreement and is the calculated value of your car at the end based on the type of car, the depreciation and a number of miles you will drive.
The second option is to simply hand the car back to the finance company. If you have stayed within your mileage allowance and the wear and tear guidelines, there will be no additional costs and you can walk away with no extra hassle.
The third option is you can part exchange the car and upgrade to a new one. This is a good choice if your car is worth more at the end of the agreement than the GMFV because you can use the extra value as a form of deposit on the next car.
Hire Purchase agreements
For those of you who love the idea of owning your own car, but don’t want to pay outright, you can get your chosen car on a Hire Purchase agreement at the same time. It is less flexible than a PCP agreement in terms of options at the end. However, it is the most efficient option if you want to be the legal owner of your car.
When a Hire Purchase agreement comes to a close, you will own that car. Your deposit and subsequent monthly payments will cover the value of the car and there is no balloon payment at the end. You simply pay those monthly payments.
You can pay an early settlement by paying off the amount that equals the remaining unpaid monthly payments and interest. By paying the early settlement, you become the legal owner of the car that much sooner.
Lease Purchase
LP deals are a sort of go-between with regards to HP and PCP. Through LP, you have to become the legal owner of the car. There is no option to hand the car back. However, it is similar to PCP because there is a GMFV payment you must pay at the end to become the legal owner.
Most Lease Purchases last between 24-48 months with some reason 60 months and they involve a deposit, monthly payments and a final balloon payment. You are then the owner of the car. You can pay that balloon payment either in a single lump sum or you can take out a second finance agreement to cover the cost.
Getting them together
Today, getting a car and a finance agreement together has never been easier with Hippo Motor Finance. Our staff work hard to find you the right car to suit your needs and desires, whilst also finding you the best finance option to match your budget requirements. There is no longer any need to get a car and a finance agreement from two separate places. With us, you can get it all in one place, hassle free.
