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Finance Options Explained
Finance Proposal Forms Download a proposal form to be completed manually Finance Lease Finance Lease gives you the option of vehicle funding only. The product stipulates that the customer cannot purchase the vehicle from the funder - it must be sold to an unconnected third party when finished with. The user of the vehicle bears the risk of what it may be worth at the end of the contract (when it is sold) compared with final rental owed to the funder. To manage the risk element, the customer can create a safety margin by requesting a "Balloon" payment that is less than the predicated Residual Value (RV). Hire Purchase (HP) Hire Purchase is the longest standing, most established vehicle financing method available. Over an agreed term, the customer will repay the capital cost of their vehicle in monthly installments along with interest incurred. Contract Hire (CH) Contract Hire is essentially a long term car rental contract paid on a monthly basis over an agreed term; usually 2, 3 or 4 years. Contract hiring a vehicle can offer both non-maintenance and full maintenance contracts. A full maintenance contract is where the finance provider is responsible for maintaining and servicing the vehicle and includes all costs due to fair wear and tear. Lease Purchase (LP) Lease Purchase is structured in the same way as a Personal Contract Purchase (PCP) in that a capital lump sum amount, known as the Residual Value (RV), is deferred to the end of the agreement. However, unlike PCP, Lease Purchase offers no option to return the vehicle to the finance company at the end of the contract. It is the customers' responsibility to settle the final balloon payment either though additional finance, or cash settlement. Personal Contract Purchase (PCP) Due to the flexibility and low monthly payments, PCP has rapidly become an alternative way in which to finance new vans. The customer pays an initial deposit, followed by a series of monthly payments and at the end of the term the customer then has the option to make a final lump sum payment in order to own the van, or to merely return the van with no further obligations.
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