Now you have found the car of your dreams we want to get you into it as soon as possible – and that means finding the best finance deal for your personal needs. That’s why RAC Cars have partnered with one of the market leaders – Carfinance247 – to offer you a panel of funds providers who all work off a single application form.
You pay an optional deposit and pay back regular instalments monthly. A fixed monthly cost over a fixed term makes budgeting easier, you can also settle earlier if personal finances allow. At the end of the agreement you own the vehicle.
This could be the option for you if: - you have a poor credit history, you plan to keep the vehicle past the term, or other finance options with restrictions on mileage or eventual ownership are not desirable.
You pay a deposit and then pay regular monthly instalments usually over a 36 or 48 month period. Instalments are generally lower than HP as you are borrowing the difference between what the car is worth now and what the car is worth in the future, the ‘Guaranteed Minimum Future Value’ (GMFV). At the end of the term you have 3 options, hand the vehicle back and walk away, pay the final ‘balloon’ payment, or trade the vehicle in and start again on a new vehicle. Be mindful that mileage is taken into account to calculate the GMFV, if you exceed the final mileage figure there will be an excess mileage charge.
This could be the option for you if: - you have a deposit and low monthly costs are appealing, ownership of the vehicle is of less importance, or you plan to get a new vehicle every 3 to 4 years.
The difference between this and HP or PCP is that the loan is not secured against the vehicle, so the vehicle belongs solely to you, generally this puts you in a better bargaining position. This also means you can sell the vehicle on at any time (you will still need to keep up with your repayments). Typically interest rates are more favourable and you won’t need to stump up an initial deposit.
This could be the option for you if: - ownership of the vehicle is important, you have a decent credit rating, or if restrictions on mileage are off-putting. Other types of finance to consider are: - credit such as credit cards, or you may wish to dip into your personal savings. Whichever form of finance you choose ensure it is the right choice for you now and in the future.
Motor finance offers are subject to status and are provided by Carfinance247 who can introduce you to a selected group of lenders who may be able to help you finance your purchase. Carfinance247 Limited is a Licensed Credit Broker. All finance is subject to status and income. Written Quotation on request. Carfinance247 can introduce you to a limited number of finance providers based on your credit rating and will receive a commission for such introductions. Carfinance247 Limited is authorised and regulated by the Financial Conduct Authority, registration number 653019. Registered office: 12-18 Pollard St, Manchester, M4 7AJ