Capital Car Finance specialise in low rate used car finance schemes from several major UK lenders. If you are buying your used vehicle from a UK motor dealer and are not happy with what they have to offer, then give us a call, we will save you money.
Most of our used car finance is based on either used car lease purchase or used car PCP finance products and are all designed to save you a considerably amount of money compared to using dealer finance.
We can offer used car loans for most used vehicles up to 5 years old, providing the car is purchased from a UK supplying dealer. Most of the used car finance special offers we have are based in the prestige market, as we have a strong presence in this sector, so if you are buying prestige brands such as BMW, Audi, Mercedes, Lexus, Land Rover or Volkswagen, we should be able to offer you an even better deal!
Used Car Finance – PCP
A PCP used car finance scheme will enable you to purchase a used car with significantly lower monthly repayments than using a traditional Hire Purchase or used car loan. This is achieved by deferring a lump sum until the end of the contract, which is known as the Guaranteed Future Value or GFV.
The Guaranteed Future Value plus your initial deposit are subtracted from the cash price of the vehicle and your monthly payments are calculated on the balance remaining plus interest.
By only repaying the difference between the cash price and the final GFV balloon payment you are effectively only financing the depreciation on the vehicle.
What are the options with used car finance PCP?
1. Return The Vehicle – You can return the vehicle to the finance company as long as you have not exceeded the agreed mileage at the start of the contract, you will have nothing more to pay.
2. Settle the final GFV – If you want to keep the vehicle, you can simply pay off or re-finance the outstanding GFV balloon payment.
3. PX against another vehicle – You can part exchange your vehicle for another new or used car and if the trade-in value is greater than the final GFV, the difference can be put down as a deposit on your next vehicle purchase.
At the beginning of the agreement, you decide on the total mileage for the contract period and if you decide to hand your vehicle back to the finance company and your mileage exceeds the agreed mileage, you simply pay a fixed amount for every extra mile.
Wear & Tear
It is in your interest to minimize the vehicle’s ‘wear and tear’ and not exceed the agreed mileage. When the agreement has finished, the vehicle may well be worth more than the GMFV, providing you with extra value. In simple terms ‘normal wear and tear’ means that for its age and mileage, the vehicle is in fair working order, condition and repair. A detailed guide will be provided to you by the finance company at the start of your agreement.
Used Car Finance – Lease Purchase
Used car lease purchase is similar to used car PCP finance but with a little more flexibility in that there is no tie to a mileage or term. Lease Purchase car finance is sometimes referred to as Hire Purchase with a balloon but is structured in a similar way to that of Personal Contract Purchase (PCP).
The customer will normally benefit from a slightly lower finance rate with a used car Lease Purchase scheme as there is no guarantee offered by the finance company at the end of the agreement, you simply decide on how much you want to defer, there is obviously a maximum set by the car finance company based on the vehicles age and mileage at the start of the agreement.
The deferred capital lump sum amount at the end of the agreement is known as the Residual Value (RV) or balloon and this has to be paid should the customer wants outright ownership of the vehicle.
Deposits for Lease Purchase typically range between a minimum of 5% and a maximum of 50% of the vehicle sales price and repayment periods for used car lease purchase are typically taken over 24, 36 or 48 months. Settlement can be made at any stage of the agreement, which adds greater flexibility. We would always recommend a realistic and sensible balloon at the end of the agreement to encourage some equity and give you the opportunity to do another deal again.
The Residual Value (RV) is calculated and set at the beginning of the agreement, although this is not payable until the end which reduces the regular monthly payments accordingly, thus making vehicles that traditionally have a strong Residual Value (RV) more suitable for this type of product as they make repayments far more affordable.
What are the options with used car finance Lease Purchase?
1. Settle the agreement – You can settle the used car lease purchase agreement anytime by asking for a settlement figure, if you want to keep the vehicle, you can simply pay off or re-finance this amount.
2. PX against another vehicle – You can part exchange your vehicle for another new or used car and if the trade-in value is greater than the final payment, the difference can be put down as a deposit on your next vehicle purchase.
There is no excess mileage with used car lease purchase, as the vehicle never goes back to the finance company.
Because the used car lease Purchase Plan has no tie to a mileage contract and typically offers a lower rate incentive, it make this type of finance product a popular choice and the best solution for most of our customers.
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