Used Car Finance

Used Car Finance

At T W White & Sons, we are here to help and assist you in finding the most suitable and affordable finance option for your next vehicle.

We work with a number of different lenders, so whether you have a lower credit score or are just unsure as to which finance product is best for you, our friendly showroom team will be able to explain the benefits and differences between finance products.

None of our Client Advisors are paid commission on the sale of any vehicle, finance product or ancillary product, so you know they are totally focused on finding the correct product for you.

Personal Contract Purchase (PCP) is a popular form of car financing that offers lots of flexibility when purchasing a used vehicle.

Here’s how PCP works:

Deposit: You start by paying a deposit on the car. The larger the deposit, the lower your monthly payments will be. If you have an existing vehicle, our sales team will be able to provide you with a trade in value which can then form part of the deposit for your next car.

Monthly Payments: You will pay set monthly payments over a specified contract term, usually 2 to 4 years. These payments cover the depreciation of the car’s value over the contract period, plus any interest.

Age and Mileage of vehicles: Different lenders have different criteria of how old a vehicle can be at the start or end of an agreement. Some lenders have a maximum age of vehicle of 7 at the end of the agreement, others will allow the agreement to go for longer. Our Client Advisors will be able to assist you with further information depending on which vehicle you are interested in purchasing.

Guaranteed Future Value (GFV): At the beginning of the PCP agreement, the finance lender will give a guaranteed minimum value for the car at the end of the contract, known as the Guaranteed Future Value (GFV) or Optional Final Payment (OFP). This value is based on factors like the car’s make, model, mileage you plan to cover each year, and condition. It’s essentially a prediction of what the car will be worth at the end of the agreement.

At the end of the contract you have 3 options:

  1. Buy the car: You will have the option to purchase the car outright by paying the Optional Final Payment.
  2. Return the Car: If you don’t want to keep the car, you can return it. You usually won’t owe any additional money unless there’s excess wear and tear/damage or you have exceeded you agreed annual mileage.
  3. Renew the car: You can use any equity you may have in the car (if the current value is higher than the GFV) as a deposit for a new PCP agreement on another vehicle. You can trade your car in (or sell your car privately) at any stage in your contract if you chose to settle the finance in full.

Hire purchase is a way of splitting the cost of vehicle purchase over a set length of time.

Here’s how Hire Purchase works:

You agree a deposit amount, the larger the deposit, the lower the monthly payments.

The interest rate will be fixed by the finance company, and you will pay set monthly payments over a pre-determined period, usually between 1 and 5 years.

After signing your finance agreement, you take legal ownership of the vehicle with immediate effect, however, the finance company will use the car as security in the loan, similar to how a house is security when taking out a mortgage.

Unlike a PCP agreement, you do not have to worry about sticking to a set mileage, or what the vehicle will be worth at the end of the agreement – you simply pay all the instalments in full for the length of the finance term.

Once the agreement is finished, you have finished paying for the car in full. If you would like to purchase a new car at that stage, you can arrange a new finance agreement and use the value of your existing car as a deposit for a new vehicle.