Personal Contract Purchase Agreements
Personal contract purchase is one of the most popular options for Honda car finance. This is a good choice if you are not planning on upgrading the vehicle for the foreseeable future. The monthly repayments are typically quite low with the provision to make a lump sum payment initially. Your monthly repayments are scheduled for a set duration with the balance of the finance due as a lump sum as a final payment. However, there is some flexibility with this type of finance as you can choose to make the final lump sum payment and keep the vehicle or return or part exchange the vehicle against a new agreement.
Hire purchase is considered to be a traditional form of new or used car finance. This agreement allows for you to borrow the funds needed and repay them over a set term. The amount available to borrow is typically dependent on the amount of deposit put down. Generally, the higher amount of deposit, the lower the monthly repayments, and the less interest is accrued. Once the loan has been repaid, the ownership of the vehicle is passed to you. Hire purchase is considered to be a secured loan and should you default on repaying the loan, the vehicle is classed as security and will be subject to repossession.
Credit or lease-purchase is a similar form of Honda car finance to personal contract purchase agreements. The main difference is that credit purchase does not have a provision to return the vehicle at the end of the agreement. Typically, you can repay the loan over a longer-term and reduce the lump sum final repayment. Credit purchase generally has a more attractive interest rate than many other forms of used car finance. However, the longer the term for the credit purchase, the more interest will accrue and the greater the overall cost. Most people consider this to be the most affordable method of purchasing a new vehicle, as you can set the monthly repayments to suit your particular requirements and budget.
All of these finance options have particular benefits and limitations. Before you commit to a finance deal, you should not only consider the interest rate and monthly repayment charges but the long-term implications of the agreement. For example, you need to be aware of the financial limitations of the arrangement and whether it will be detrimental should you decide to upgrade or change your vehicle before the finance term has expired. This will enable you to make an informed decision and be happy with your new purchase.
If you are looking for a new or used Honda, contact us. We have a wide selection of vehicles and our sales team would be happy to discuss Honda car finance options to determine which is best suited to your needs.