Car finance, Hire purchase, Car loan, PCP, Personal contract purchase – what ever you want to call it is one of the main options that our customers choose to use when funding their new car from MSG. This type of funding usually requires a deposit or initial payment to be made – typically arond 4 times whatever the monthly cost is and then a fixed period of repayment anywhere from 12 months to 5 years. The types of Car finance that are available from MSG are all geared towards the customer that may well have been declined through mainstream, lenders such as Banks, car dealerships, finance houses, and other High steet funders such as Black Horse, Santander, Alphera, ING, Fortis and Lombard.
Outright car finance is very straight forward in that the total amount being borrowed is spread over a number of months and will usually have an initial payment at the start to make. This type of contract is also sometimes known as HP or Hire purchase and can be the most straight forward to understand. Car finance also allows the end user to hand the car back once half of the repayments have been made to the funder under what is called Early or Voluntary termination.
Car Finance with a balloon
The balloon payment is also known as a final payment and is the amount that needs to be paid at the end of a contract in order for the customer to own the car outright. The option is always there to simply hand the car back to the finance company with nothing else to pay and look to start a new deal instead. A balloon is often added to a Hire purchase deal as it reduces the amount being borrowed in total and so will reduce the monthly repayments considerably. The Car finance with a ballon is often one of the most cost effective options that we offer and so would be recommended to look into. This is also known as a PCP option or personal contract purchase and can be carried out over 2, 3 and 4 years usually.
Early settlement of Car finance
With Hire purchase the user can request a settlement figure at any time and this will be the amount that the finance company require to settle what is owed on the car. With this amount the customer has the choice to simply pay what is owed and then the ownership of the car will transfer to the consumer. The other option is to then take the vehicle to a dealership and use it as a part exchange on a new car – with the dealership paying off the outstanding finance and contributing any money left over into the new deal. For this second option at settling the car finance to work the car will need to be valued at more than the settlement figure as if it has depreciated too much it would leave the customer short and require them to make either a financial contribution to the new deal or have to increase their monthly repayments to balance the books!