Ford Transit Hire Purchase In Essex

Essex Ford Transit Centre finance options

Despite the word 'hire', Hire Purchase is about ownership. If you use Hire Purchase to finance the purchase of a car, it is actually committing to buying the car outright via a secured loan that is paid back monthly across the agreed period (usually 3-5 years). Monthly payments are therefore much higher than when 'leasing' or using PCP.

Advantages of Hire Purchase

  • Hire purchase is cheaper than a ('unsecured') personal loan because the ownership of the car is retained by the finance company (i.e. it is secured) and if you don't make your monthly payments, then they will simply take the vehicle back.
  • Hire purchase is relatively quick as it is offered directly by most dealers and manufacturers and is agreed to more easily than personal loans.
  • Deposits are lower than with personal loans.

And compared to Personal Contract Purchase (PCP), if the final 'balloon payment' is paid to acquire the car, then a Hire Purchase agreement would likely have been cheaper overall even considering notably higher monthly payments.

Compared to Personal Contract Hire, if you intend to own and retain the same car for more than 4 or 5 years, than Hire Purchase is cheaper over the long term than leasing because there are no further payments once you own it completely.

Disadvantages of Hire Purchase

Compared with Personal Contract Hire or Personal Contract Purchase:

  • Often the finance company will expect all of the VAT for the whole value of the car to be paid with the first instalment, whereas with leasing the upfront payment is only the equivalent of three months' payments.
  • Monthly payment required is always much higher.
  • You are paying interest on the full value of the car, even if you don't intend to retain it for longer than 2-4 years.
  • Often hidden fees and individual dealers are not incentivised to offer you the best deal immediately, so you would need to shop widely before being sure you have a good deal.
  • Termination fee is significant if your circumstances change and you don't want the car any more.Compared with a personal loan, you are not the owner of the car from day one, so you can not modify or export it.

Choosing the most cost-effective method of funding a vehicle for your business can be a daunting task. Our Transit Centre advisors listen to your needs and take into account your situation before recommending a funding option for you. Please call one of our team today for impartial, practical advice about financing your vehicle. We are here to help and find solutions that work for both you and your business.

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