At the end of a PCP deal you’ll have three main options. Your first is to pay the final balloon payment and own the car. Second, you could walk away with nothing more to pay. Finally, you can trade the car in, using positive equity to fund the deposit for your next vehicle.
Is PCP a good idea?
A PCP can be a good way of owning a car for a short term, then if your circumstances change, you don’t have to worry about the financial burden any more once you’ve handed the car back. But then you won’t have the car as an extra bargaining chip when it comes to arranging a deposit on your next car.
How does PCP work Ireland?
PCP is a Personal Contract Plan which is a form of hire purchase agreement. It is a car finance package that has lower monthly payments over three years compared to a Hire Purchase contract over the same period. With PCP you can have a flexible finance plan to suit your own circumstances.
What’s the difference between PCP and PCH?
PCP is a purchase plan, customers have the option to buy the car at end of the contract. PCH is a hire plan that can offer attractive monthly payments but you do not own the car at the end of the agreement. If you’re in the market for a new car, you might be starting to research which finance option is best for you.
What happens at the end of a PCP? – Related Questions
Do you own the car at the end of HP?
You don’t own the car until you’ve made your final payment, which means if you get into financial difficulties the finance company could take it away. You can’t sell or modify the car over the contract term without getting permission first. Monthly payments are usually higher than for PCP and leasing deals.
Is PCH easy to get?
Who is eligible? Like PCP, PCH is easiest to get if you have a good or excellent credit rating. If your credit rating is poor or bad, you are less likely to be approved as the finance providers may consider you to be too much of a risk. That means you may be limited in the choice of options you have available.
What is PCH car?
Personal Contract Hire (PCH) is a type of long-term rental that will suit you if you’re not looking to buy the car at the end of your contract and won’t need to change the car before the end of the contract. You lease the car for an agreed period of time by making fixed monthly payments.
What happens when hire purchase ends?
The end of a hire purchase agreement
In a hire purchase agreement, the cost of the car and the interest is spread across the entire length of the finance period. So when you reach the end of the agreement, you will have paid off the entire cost of the car and will own the vehicle.
What’s the difference between hire purchase and personal contract purchase?
With HP you’re technically paying to hire the car and will only own it after making the final payment. For personal contract purchase you’ll pay monthly payments on a portion of the car’s value and have the option to make a higher final payment – called the ‘balloon’ payment – at the end of the deal to keep the car.
Is HP or CS better?
The key difference between a CS and HP agreement is that you will become the legal owner of the vehicle, once all repayments have been made to the lender, where as on HP there will be an option to purchase fee at the end of the contract before you legally own the vehicle.
Can you hand back a HP car early?
With hire purchase (HP), you can return the car early if you’ve already paid for at least half of its cost or make up the difference between what you’ve already paid and half of its cost. If you’ve already paid more than half the car’s cost, you won’t receive a refund of the difference.
Can my car be repossessed if I have paid more than half the agreement?
In line with the ‘thirds rule’, if you’ve paid more than half of your hire purchase loan, your car finance repossession rights take effect, and your lender cannot repossess your vehicle without following the proper processes. However, you can return your vehicle to the dealership at any point after you’ve paid half.
Can I give my HP finance car back?
If you bought your car using personal contract purchase (PCP) or hire purchase (HP) then you’re allowed to hand it back to the finance company if you have already paid off 50% of the loan, including any interest and fees. This is known as voluntary termination.
What happens if your engine blows on a financed car?
“If your engine blows up on a financed car, you’re still on the hook for the payment. Unfortunately, your car insurance won’t pay for the damages either, as even full-coverage policies won’t cover this.
Is it worth paying off car finance early?
Paying off your car finance early can save you money on interest, but it won’t always be the best decision. It could be worth paying off your finance early if: Paying the settlement figure to clear your finance is cheaper than continuing with your repayments. You want to own the car outright.
Can you sell a car on finance then pay it off?
Can I sell my car while I’m paying off a loan? Yes, you can, because paying off a loan is a very different situation to when you’re paying off finance. With a finance deal, the deal is secured against the car, but there’s no such link with a personal loan.
Can I upgrade my car while on finance?
Now, many people assume that you can’t upgrade your car while you are still making car loan payments on it but this isn’t true. Once you pay off the loan and residual payment in full before the time of the sale, then you’re good to go.
Can I swap my finance car for another?
Can you swap a car on finance? The short answer is no, not without settling up with the lender. As the finance payments haven’t been settled, you don’t actually own the car outright just yet. As a result, you need to clear them before you can begin to think about swapping vehicles.
Can I get 2 cars on finance?
There’s no limit to how many cars you can have on finance at one time. The number of finance agreements that you can be approved for would depend on your individual circumstances, credit history, and affordability. It isn’t unheard of for people to have two or three car finance agreements in their name.
What is a good credit score for buying a car?
In general, lenders look for borrowers in the prime range or better, so you will need a score of 661 or higher to qualify for most conventional car loans.