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BEST CAR FINANCE DEAL - WHICH IS BEST FOR YOU?
> Personal Contract Purchase (PCP)
> Lease Purchase (LP)
> Personal Contract Hire/ Leasing (PCH)
> Business Contract Hire/ Leasing (BCH)
> Hire Purchase (HP) Secured
> Car Loan Personal Loan Unsecured
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PERSONAL CONTRACT PURCHASE (PCP) BEST DEAL IF:
> Q1) You are a private individual?
> Q2) You want to cut payments to minimum?
> Q3) You want option to buy or hand it back?
> Q4) You drive fewer than 20000 mls annually?
> Q5) You are employed with good credit record?
IF YOU HAVE ANSWERED YES TO THE ABOVE, WE RECOMMEND PCP
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LEASE PURCHASE (LP) BEST DEAL IF:
> Q1) You are private or s/employed or company
> Q2) You want to cut payments to minimum?
> Q3) You want to buy it at the end (not hand back)
> Q4) You drive fewer than 20000 mls annually?
> Q5) You/ company has good >3Yrs credit record?
IF YOU HAVE ANSWERED YES TO THE ABOVE, WE RECOMMEND LP
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PERSONAL LEASE (PCH) BEST DEAL IF:
> Q1) You are a private individual?
> Q2) You want to cut payments to minimum?
> Q3) Only hand it back at the end (ie not buy it)?
> Q4) You drive fewer than 20000 mls annually?
> Q5) You are employed with good credit record?
IF YOU HAVE ANSWERED YES TO THE ABOVE, WE RECOMMEND PCH
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BUSINESS LEASE (BCH) BEST DEAL IF:
> Q1) You are self employed or a company
> Q2) You want to cut payments to minimum?
> Q3) You want to hand it back at the end?
> Q4) You drive fewer than 20000 mls annually?
> Q5) You/ company has good >3Yrs credit record?
IF YOU HAVE ANSWERED YES TO THE ABOVE, WE RECOMMEND BCH
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HP OR CAR LOAN BEST DEAL IF:
> Q1) You are private or s/employed / company
> Q2) You want balanced payments and no balloon
> Q3) You want to own it at end (no final payment)?
> Q4) You drive any annual mileage, low or high
> Q5) You/ company has good >3Yrs credit record?
IF YOU HAVE ANSWERED YES TO THE ABOVE, WE RECOMMEND HP (SECURED) OR PERSONAL LOAN (UNSCECURED)
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NEW CAR FINANCE OPTIONS EXPLAINED:
1. New Car PCP - Personal Contract Purchase
A New Car PCP is best for buyers wanting to keep monthly repayments low and like to change a new car every 2-4 years with the minimum of hassle. The typical APR cost is 8%-14%. You pay a deposit, then regualr monthly instalments. A lump sum is left unpaid at the end (known as the Guaranteed Future Value (or GFV) or Guaranteed Residual Value (GRV), or may have the word Minimum in front of either eg Minimum Guaranteed Residual Value. This outstanding lump sum is also referred to as the balloon payment. You pay this sum off at the end of the contract if you want to own the car after the agreement. If not, you just hand the car back and owe nothing extra. The amount deferred (the GRV or GFV) is set by the finance company and cannot be renegotiated later. Assuming you have made all the payments, lenders guarantee your car is going to be worth at least that figure at the end. You have three different options when the contract is paid
- pay the GFV/GRV/ balloon thus buying the car
- sell the car yourself and make last payment
- pay nothing, return the car back to the lender
If your car is ultimately valued at a higher price than was projected (the GFV/GRV) you can use any equity or difference as the deposit on your next new car. Although it is convenient and offers lower monthly payments, PCP usually costs more than a loan or hire purchase over the entire agreement period. You also have to estimate your future annual mileage - and if you exceed that mileage, you will be charged extra between 5p-15p per additional mile. If you return your car in poor condition - any damage is normally charged to you (but normal wear and tear is accepted).
2. New Car PCH - Personal Contract Hire
Also known as New Car Contract Hire, Car Leasing (PCH or BCH) works for both personal (PCH) and business (BCH) users alike. The only difference being that new car business users can reclaim 50% or 100% of the VAT depending on their type of business and the use the new car is put to whereas personal users must pay the VAT and cannot reclaim it on any new car or van. Remember to allow for car insurance - for although leasing is more like long term rental, you still have to pay for motor insurance, maintenance and fuel. Leasing is usually best for those wanting a new car to be changed regularly without any hassle of buying, owning or selling it themselves afterwards. Personal Monthly payments typically range from £100 up to ££400 per month (over 2 or 3 years). Just choose a new car (from a limited new car special offer list the motor dealer will provide); decide how long you require it for, and fix your projected annual mileage. The depreciation, the leasing discount, your mileage and deposit level determine the size of your new car monthly repayments. You can opt for inclucive service maintenance, though check the annual service schedule to see if this represents good or bad value for your period of use. Normally you pay in advance, 3 or 6 monthly rentals, expressed as 3+35 or 6+35 (both actually 36 months use).
3. New Car Hire purchase - HP
New Car HP is best for those wanting simple new car finance that's easy to apply for and arrange with the dealer. Typical HP rates are 6.9% to 10.9% APR. Pay initial deposit, typically 5-10% of the new car price. Pay the outstanding sum including interest in set monthly instalments. There might be fees to pay (normally "an arrangement fee" and 'option to buy' fee at the end). HP is secured on the new car itself so you don't actually own the new car until the end of the agreement. Remember you cannott sell the new car or modify it without the prior written permission of your lender.
4. New Car Personal Loan
A new car personal loan can be either secured or unsecured. An unsecured Personal Loan means a lender cannot repossess your house even if you fail to keep the loan fully paid. Nevertheless, you are obligated by law to repay the loan on the terms you agreed. Borrow a fixed sum to buy your new car then repay it in fixed monthly instalments over a pre-agreed period (known as the term). Normally, the interest payable is also fixed. APR rates for a secured loan are normally lower than an unsecured personal loan - but watch out for extra secured lending fees (and you could be putting your home at risk if payments fall behind). Important points: Early Repayment Charges can incur charges - so always ask if there are penalties early settlement. In particular, ask what interest you need to pay together with your final payment (plus any other fees or charges that may become due). Are there any charges for late payments on your New Car? Many lenders request that your new car monthly payments are made by direct debit from your bank A/C. That way the lender can be certain to be paid on time. If your payments are late, you will normally be charged by your lender or bank - so ask how much these costs could be. A Secured Personal loan is for home owners, your home is used as security. If you should fall into difficulty repaying your secured loan, a lender can legally repossess your house then sell it (to repay the outstanding loan on your new car).
5. Free New Car Finance (0% APR)
If you have plenty of deposit available for your new car (normally 30-50% downpayment) there is no interest on your monthly payments at all. It is somewhat expensive on a pure monthly figure basis (compared with say PCP) and it's only available on new cars currently with a free finance offer. It is also rather unlikely you will negotiate the biggest discount AND a 0% free finance deal, so check to see if it actually ends up being more expensive overall over the full term? Bear in mind that new car makers normally pay for the free finance with money you might negotiate as discount, so looking at it that way, it's not really free finance at all!
HOW TO FIND THE CHEAPEST NEW CAR FINANCE DEALS
New car finance is often available at low rates from 5.9%-8.9% APR. However, where we find free finance 0% offers on a new car, we'll always make sure you get a quote. Since the credit crisis, we have found that the best car finance deals are often arranged independently of the main dealer, so just ask us for the latest online price comparison. Business and company car drivers may want to choose a new Car lease because there can be tax advantages. However, bear in mind you will not own the car at any stage - most new car leasing deals end up handing the car back to the lender at the end. Nevertheless, a VAT registered company can benefit from new car contract hire, especially for taxi drivers and courier/ delivery firms. In the end, there is no substitute for a web car price comparison - once we identify the best new car discount, we'll set about combining that with the cheapest loan or source of money. If you only want a brand new car uk specification, we'll restrict our search to franchise dealers with cheap new cars for sale (most want full price, some will sell at trade price). Sometimes, we find the lowest prices with the help of a new car broker - but you'll always buy it from the main dealer. Car finance and PCP can be arranged on nearly new cars; but the monthly payments are often almost the same - so we'd suggest you buy a new car. The latest PCP finance on 2012 model new car prices have gone up a little, but the Broadspeed discount will soften the blow! Ask us to checl if there are any special offer loans or PCP deals on nearly new cars (APR under 7%).
SPECIAL OFFER CAR DEALER 0% FINANCE & PCP
Since the web became an important marketing tool for car dealers, finance for new cars online prices started to fall and this soon reduced PCP payments. The key consideration on PCP is not buying cheap cars but choosing a new car with low depreciation. Why is a £40,000 Voyager MPV almost double the monthly cost of a £40,000 Boxster? It's the different rates of depreciation over three years that influences the cost per month. Consequently, for a low depreciating new car (eg Land Rover and anything German) we would advise you to go for a PCP; but if you are buying a high depreciating car (such as Ford, Pegeot...) we'd suggest you buy a new car using the cheapest personal loan we can find. Phone if you are ready to purchase, as wse often have new car finance deals supported by the manufacturer - extra savings that do not impact the best discount rate. If dealers get really stuck for sales, they commonly make a demonstrator or a pre registered car (essentially new with number plates). Watch out for 2012 61 12 plate deals next year, or 2011 60 11 registration discounts this year. Compare used car prices too - as a low mileage 2010 10 59 plate on PCP can represent terrific value - and still be fully covered by the balance of the factory warranty. If you haven't checked the mags yet, call us for the latest new car finance reviews - we have many up to date car road test reports and will happily suggest the best deal.
UK CAR LEASING & PCP QUOTES
In 2011, it's fair to argue that theer is no good argument to waste your own money - even when there are cheap car prices on offer. There is no doubt that the cheapest new cars are those where the dealer discount increases if you use car manufacturer funding. We have seen cash support of thousands of pounds - that reduces your car price - and cuts the sum you need financed. To give you an example: a new Mercedes C200 CDi Manual with Comand and Artico trim was less than £260 a month inc VAT! That's a bargain new car however you look at it (less than a Ford Focus 1.6 TDCi)! Get approved for finance and the right offer will follow - all driven by the huge car web discounts provided by the factory. The lowest finance rates are typically applied to new car prices that are 25-30% off the list price. If you see a new car for sale at your local dealership, but the finance deal is hopeless, call us as we can often sharpen the local business manager's pen. If not there are plenty of new car sales finance specialists - even with a poor or low credit history. We only deal with uk cars buy new or factory fresh uk supplied cheap new cars on special offer. If you have any difficulty finding what you need online, try searching for broker car Uk - or for main dealer quotes new cars uk - but in the end you will find cheap new car prices by simply visiting the Broadspeed.com web site. If you need any car finance advice, feel free to call 02071834750 until 7pm (Mon-Saturday).
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