Belfast Telegraph - NI Carfinder - - News -

For many pri­vate buy­ers fi­nanc­ing their next car can be con­fus­ing.

With many dif­fer­ent ways to fund a ve­hi­cle many strug­gle to un­der­stand their best op­tion. Cash? PCP? Hire pur­chase? Which is best for you?

We spoke with Sean Dunne, Fi­nan­cial Con­troller of Subaru NI for ex­pert ad­vice.

“For pri­vate buy­ers, cash is sim­plest,” said Dunne.

“You get own­er­ship from the out­set and in the old days the fold­ing stuff al­ways got a sharp deal.

“Times have changed though, liq­uid­ity is tight and few want to dis­rupt their long term sav­ings and in­vest­ments to buy a new car.

“Pri­vate buy­ers have two main al­ter­na­tives — Hire Pur­chase or Per­sonal Con­tract Pur­chase (PCP).

“Hire Pur­chase is well un­der­stood, you pay a de­posit, then re­pay the full bal­ance (cap­i­tal and in­ter­est) over typ­i­cally 48 to 60 months.

“At the end the car is yours, al­beit monthly re­pay­ments can be sub­stan­tial as car val­ues rise, that’s where PCP comes in.

“You make the same de­posit, but there is a lump sum set aside to the end of the agree­ment that you never have to re­pay, called the min­i­mum guar­an­teed future value (MGFV).

“You pay in­ter­est only on the MGFV, so monthly re­pay­ments are much lower than HP on the iden­ti­cal car and of­ten the term is shorter so you can re­new your car sooner.

“At the end of a PCP agree­ment you can choose to make the fi­nal pay­ment (pay the MGFV), part-ex­change for a new ve­hi­cle, or sim­ply walk away.

“You only own the ve­hi­cle if you make the fi­nal re­pay­ment. Most PCP cus­tomers sim­ply part-ex­change for an­other new car, en­joy­ing low monthly re­pay­ments on a ve­hi­cle that’s nor­mally cov­ered by the man­u­fac­turer’s guar­an­tee for the full agree­ment term.

“If own­ing your ve­hi­cle is im­por­tant to you then don’t choose PCP; HP will at­tract less in­ter­est re­pay­ments if you re­pay the en­tire value.

“Of course most own­ers never ac­tu­ally own their car on HP — part­way through a finance agree­ment many will re­quest an early set­tle­ment and part-ex­change for new.

“That’s es­sen­tially why PCP has be­come so pop­u­lar — you’re re­ally only pay­ing for the pe­riod you use the car, not fund­ing the car’s full value to re­sell the un­used life­span back to your dealer in a few years’ time.

“PCP is a bit like hol­i­days, you don’t buy a ho­tel, then sell it back af­ter your va­ca­tion, you just pay for the pe­riod you’re go­ing to stay.

“PCP de­liv­ers what most cus­tomers’ want: a bet­ter car, changed quicker, at the low­est pos­si­ble monthly re­pay­ment.

“Talk to your NI Subaru deal­ers for ex­pert fund­ing ad­vice tai­lored to your per­sonal cir­cum­stances, they’ll en­sure you fully un­der- stand your finance op­tions and which may best suit your cir­cum­stances.

“Be sure to check out our cur­rent ex-demo of­fers – our AWD fleet gets re­newed in Jan­uary so there are some great deals all with the bal­ance of the Subaru war­ranty at your lo­cal dealer right now. See more at and en­joy your new car.”

There are a num­ber of finance op­tions open to any­one who wants to buy a Subaru XV Cross­over through Subaru NI’S Fi­nan­cial Con­troller Sean Dunne (right)

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