BMS Cars Finance
At BMS Cars Selsey, we are all SAF approved. SAF stands for Special Automotive Finance and is a test to ensure that car dealerships are both informed and knowledgeable about automotive finance, so that they can guide their customers to finance options which suit their needs and budget.
There a variety of different finance options available on the market and each come with their own pros and cons, but at BMS Car Sales we offer the two most prominent options: HP and PCP Finance.
Understanding PCP Finance
PCP stands for ‘Personal Contract Purchase’ and is the more affordable finance option as you defer a portion of the finance agreement. At the end of a PCP finance agreement you will have the option to buy the vehicle outright if you so wish, however this will require an additional payment, which is often referred to as a ‘balloon payment’ and will be the final payment.
Pros of PCP Finance
- The deposit amount is often flexible, meaning it can meet individual requirements.
- You can choose how long the finance term runs for (which is usually between 24 – 48 months).
- There’s no obligation to keep the car at the end of the finance agreement.
- At the end of the finance term you have three options available; you can choose to keep the car by paying the deferred amount in full. Or alternatively you can choose to return the vehicle to the finance lender or part exchange it.
Cons of PCP Finance
- If the car exceeds normal amounts of wear and tear you may be liable for extra costs.
- If you exceed the agreed upon mileage, you’ll be liable for the extra miles.
How Much Does PCP Finance Cost?
The monthly repayments on PCP finance will be dependant on a variety of factors, such as; the cost of the car, the size of the deposit, the length of the finance term and interest rate, and how much the vehicle will be worth once the agreement ends. This is often referred to as GMFV which stands for Guaranteed Minimum Future Value.
When discussing PCP finance with us, our staff will always go over what’s expected in the contract. This will include what condition the car is expected to be returned in, how many miles the vehicle is allowed to do and what’s classified as general wear and tear. The contract is in place to protect both you, the customer, and the lender by ensuring you’re both on the same page. This is done by outlining what is expected and what is covered in the finance agreement, from the offset. For example; by making the mileage and condition expectations clear from the beginning it protects the vehicle from being returned in a damaged condition with a high mileage therefore making it unsaleable, because if these things were to happen the customer would be subjected to fines to cover the costs of extra miles, or the repairs to damage.
Understanding HP Finance
HP stands for ‘Hire Purchase’ and in terms of agreement, it is fairly similar to how you would take out a mortgage on a house. The way a Hire Purchase finance agreement works is by the customer paying a deposit, and once that’s done the finance company will loan the rest of the amount. This loan is to be paid back in monthly installments with a set interest rate, over an agreed upon term.
Pros of HP Finance
- The vehicle is yours at the end of the contracted agreement.
- There are no limits or fines for wear and tear.
- You are able to choose the length of the contract (which is usually between 12 – 60 months)
Cons of HP Finance
- The car is not owned until the final payment.
- This type of finance can often be more expensive because it includes the cost of owning the vehicle.
How Much Does HP Finance Cost?
Just like a mortgage, the repayment costs will vary depending on a variety of factors. These factors include; the size of the deposit, the interest rates, the length of the agreement and how much the car itself costs.
|Fixed monthly repayments||✔||✔|
|Fines for excess wear / tear||✘||✔|
|Own the car outright||✔||✘|
How The Finance Process Works
Whether you have visited our forecourt and have a dream car in mind, or you want to find out what your finance options are to help you narrow down your options; we can help by going over everything with you. Once we have proposed a deal, the finance company will run a credit check to see what they are willing to lend you. We will be there through each stage of the process to ensure that you understand what finance options are available to you, and once you have decided on the option you wish to proceed with, the finance agreement will be secured against an asset and you will be able to enjoy your new vehicle!
If you’d like to discuss car financing in more detail either call us on 01243 202015 or pop down to 96 High Street, Selsey, Chichester, PO20 0QG for a face-to-face chat.