If you want to buy your perfect car and you want lower monthly repayments, a PCP or Lease Purchase could be just right for you.
Here’s how they work.
Traditionally, when you financed a car, the dealer would work out your monthly payments by taking the purchase price of the car, deducting any deposit you’re paying (which could be from a part exchange), adding interest, then simply dividing the total by the number of months the agreement runs for. You get a fixed monthly payment. Simple.
As an example....
A car costing £12000 will be bought over 3 years. The deposit from your old car in part exchange is £2000. Which leaves £10000 to pay. Let’s imagine the interest on the borrowing over 3 years will be £1700. So the total amount of the finance is £11,700. Divide that by 36 months and you will have a monthly payment of £325.