Car Finance Options

Vehicle finance can seem like a minefield. With so many options available, how can you be sure you’re choosing the right package? Here at Blackpole Trade n Save, we’re here to help you by explaining the various plans and their benefits. We can, of course, also help you find the perfect finance package for your needs when it comes to buying a second hand car. Here are the main options explained in more detail.

Personal Contract Purchase (PCP)

PCP is a popular choice among drivers thanks to its flexibility and the low monthly repayments on offer. It’s a great option if you:

  • Don’t necessarily wish to own the car at the end of the agreement
  • Want the freedom to change your vehicle on a regular basis
  • Prefer to keep costs down

How does it work?

Once you’ve chosen your used car, you’ll need to make an initial deposit. When viewing our vehicles online, you can access a representative finance example and finance calculator on the details page, which helps you determine the cost before you commit. The higher the deposit you put down, the cheaper your monthly payments will be.

Next, agree a duration for the contract – typically 18-48 months – and your anticipated annual mileage. The cost of your regular instalments will be based on these. Part of the car’s value is deferred to the end of the contract, and is referred to as a ‘balloon payment’. This ensures any depreciation in the car’s value doesn’t put you into negative equity.

At the end of the agreement, you have three choices. You can either return the vehicle with nothing more to pay, part-exchange the model for a new one, or make the balloon payment and take full ownership.

Hire Purchase

This option is a more traditional agreement, and is best for those who:

  • Want to own the vehicle outright at the end of the agreement
  • Make a low deposit or, in some cases, none at all

How does it work?

When you’ve chosen your used car, you can pay a deposit, which is typically fairly low, and the remainder of the vehicle’s value is paid off over an agreed term. In some cases you may not need to pay a deposit at all. Contracts usually last between 12 and 60 months, and at the end, ownership of the model passes to you and you can continue to run it or sell it on as you choose.

Personal loan

Many motorists prefer to get a loan from their bank or building society to fund their purchase. This is a great option if you:

  • Want to shop around for the best interest rates
  • Want to own the vehicle outright

How does it work?

In contrast to the previous two options, a personal loan is one that you take out from your chosen provider and then use to purchase the used car you want. It gives you full access to the vehicle from the moment you drive it away, with no mileage limits, as you pay the money back to your lender separately.

You can agree the repayment terms and agreement duration with your provider, and are responsible for ensuring payments are made on time as it is unsecured lending. On other types of car finance, the load is secured against the vehicle itself.

To find out more about the used car finance packages we offer here at Blackpole Trade n Save, or to book a test drive in a model that’s caught your eye, get in touch with our team in Worcester today. We’ll be happy to help.