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Personal Contract Purchase (PCP) is a popular finance option that allows you to drive a new car with lower monthly payments compared to traditional loans. With PCP, you will agree your mileage and decide on the term (length) of the agreement, typically 2-4 years. You will pay a deposit followed by monthly payments for the set term. At the end of the term, you have three options: pay a final balloon payment to own the car, often referred to as the Guaranteed Future Value (GFV), return it, or trade it in for a new model.
PCP offers several advantages, including lower monthly payments and the flexibility to change your car regularly. It’s an ideal choice if you prefer to drive a newer model and don’t want to commit to long-term ownership. If, at the end of the agreement, your car is worth more than the Guaranteed Future Value, you can use the equity towards a brand new car. However, you should be aware of mileage limits and potential charges for excess wear and tear. You also won’t own the car until all repayments, including the Guaranteed Future Value, have been made.
PCP is well-suited for those who like to drive a new car every few years and prefer lower monthly payments. It’s also a great option if you don’t want to worry about the car’s resale value, as this is taken care of by the dealer.
A personal loan involves borrowing a lump sum from a bank or lender, which you repay over a fixed period with interest. Unlike PCP, personal loans typically require higher monthly payments but give you full ownership of the car from the start.
Personal loans provide flexibility in terms of car choice and ownership. You’re not restricted by mileage limits or contract terms. However, the higher monthly payments can be a drawback for those with a tight budget.
A personal loan is a good option if you prefer to own your car outright and can manage higher monthly payments. It’s also ideal if you plan to keep the car for a long time and want to avoid any mileage restrictions.
If you secure a personal loan from a bank or another lender, you can still finance a car with us. This option allows you to shop around for the alternative loan terms while still purchasing your Suzuki from our dealership in either Bishop’s Stortford or Bedford. Once you have your loan arranged, we can proceed with the sale, ensuring a smooth and straightforward process.
What is HP?
Hire Purchase (HP) is another straightforward financing option where you pay a deposit followed by monthly payments. Once all payments are completed, ownership of the car is transferred to you.
Pros and Cons
HP offers a clear path to ownership and no mileage limits, making it a good choice if you want to own the car at the end of the term. The downside is that monthly payments are generally higher compared to PCP because you’ll be paying off the full value of the car, and you will need to make the final payment to fully own the car.
When HP is Ideal
HP is suitable if you’re looking for a straightforward way to own your car outright and can afford higher monthly payments. Once you’ve made your final monthly payment, including the option to purchase fee, you’ll have full ownership of the car. It’s also a solid option if you intend to keep the car for many years.
What is Leasing?
Leasing allows you to rent a car for a specified term, usually 2-4 years, with lower monthly payments compared to buying outright. There is also the option to include a maintenance package with the agreement which can help you keep your car in good condition. At the end of the lease, you return the car and can choose to lease a new one or end the agreement.
Personal Contract Hire (PCH)
Personal Contract Hire (PCH) is a type of leasing designed for individuals. It offers the benefits of lower monthly payments and the convenience of returning the car at the end of the term without worrying about its resale value. PCH is ideal if you prefer to drive a new car every few years and don’t want to own the car.
Business Contract Hire (BCH)
Business Contract Hire (BCH) is tailored for businesses. It provides similar benefits to PCH but with additional advantages for business users, such as potential VAT recovery and tax benefits. BCH is a good option for companies looking to manage their fleet with predictable costs and minimal hassle.
Benefits and Limitations of Leasing
Leasing provides the advantage of lower monthly payments and the ability to drive a new car regularly. However, you need to adhere to mileage limits and the car must be returned in good condition. Additionally, leasing does not provide any option to own the car at the end of the agreement.
Best Cases for Leasing
Leasing is a good fit if you prefer lower monthly payments and don’t mind returning the car at the end of the term. It’s also ideal if you like the idea of driving a new model every few years without the commitment of ownership.
When choosing the best finance option, consider your budget, driving habits, and how long you plan to keep the car. For instance, if you drive a lot, a PCP or HP agreement might be more suitable to avoid excess mileage charges. On the other hand, if you prefer lower monthly payments and regularly changing cars, leasing could be the better choice.
Your financial situation plays a significant role in determining the right finance option. Assess your monthly budget and decide how much you can afford for a deposit and monthly payments. Consider how each finance option aligns with your financial goals and vehicle needs.
Compare finance offers by looking at the total cost of ownership, including any interest rates, fees, and charges. Use online finance calculators to help you assess different options and see which one fits your budget best.
The September plate change often comes with special offers and promotions from Suzuki GB. These can include reduced interest rates, contributions towards your finance deposit, or loyalty bonuses. Keep an eye out for these offers as they can make a significant difference in the overall cost of your car.
Choosing the right finance option for your new Suzuki is key to getting the best deal, especially during the September plate change. Whether you opt for PCP, a personal loan, HP, or leasing, understanding your choices will help you make an informed decision.
To find the best finance deal tailored to your needs, visit our website and use our finance calculator. It allows you to build a bespoke finance quote by adjusting the finance term, deposit, and mileage to suit your budget. If you have any questions or need personalised advice, don’t hesitate to contact us or visit our showroom in either Bishop’s Stortford or Bedford. We’re here to help you find the perfect Suzuki and the best finance option for your situation.
Finance Disclosure: Hilton Suzuki is regulated by the Financial Conduct authority. (FCA No. 307893) finance subject to status. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase.