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Some Facts About Personal Contract Payment Plans (PCP Finance)

PCP finance

You will come across various ways of borrowing for buying a car or getting finance for buying a vehicle. The most popular way is to get a loan from a lender and pay the money back through monthly installments. If you have a good credit score then the dealer will provide you a very low rate and this will make your monthly payments cheaper. You will be getting lower interest rates on the vehicle which you plan to buy. You should use PCP finance options for the betterment of your plan.

There are many benefits which you can avail if you apply for a PPC finance agreement. These can be availed even if you do not own a car or do not intend to purchase a new one. You can use the vehicle as a trade in when you move to a different address. Sometimes, you may need the money urgently for meeting medical bills or other emergency expenses. You should consider the points made here in case you are planning to borrow money for meeting these expenses.

You can avail of the PCP finance deals if you are planning to make a personal purchase. PCP means personal property coverage. In the PCP finance agreement, you can borrow money either for purchasing a new car or paying off your existing car loan. You can use the money to make an effective investment. You can borrow up to a limit which you feel comfortable with and then you can save and use the rest of the amount for meeting any emergency or making an investment.

A PCP finance agreement can also be made for a used car purchase. The term of repayment varies according to the lender. In this type of agreement, you can get a one time fee as a deposit to the tune of three years. You can make regular monthly payments to the lender and use the remaining period of the agreement for paying off the outstanding loan amount. This will enable you to drive away in your own car after paying off your liabilities in full.

You can also opt for the ‘Final Balloon’ option available under PCP finance. Under this option, you will be charged for the excess amount outstanding against your loan. However, this is the most expensive option available. A ‘Final balloon’ option will remain open till the end of the period and after that you will have to pay back the balance in full. If you want a’Lump sum’ payment option, you need to make a post dated cheque for the whole amount. However, you should take care that you repay the balance in time so that you do not incur any late payment charges on the loan.

To apply for a PCP finance agreement, you need to fill in an application form and return it to the dealer. The dealer will process your application and submit it to the Finance Authority for approval. Once the approval is obtained, the dealer will charge a nominal fee for preparing the contract. After getting approval from the authority, you can move forward with the signing of the contract. You can either get the contract directly through the dealer or take the agreement to a financial institution for execution.

Once the contract is signed, you are now ready to go for the final balloon option. This is another common feature of PCP finance where you pay the excess mileage charges over and above the total amount of your loan. This way, you can enjoy the benefits of a lower monthly repayments and then enjoy the benefit of paying back the total loan in a couple of years. You can also opt for the additional features like travel and holiday cover under personal contract payment plans. It is a great option for those who want to go for a long term travel or holiday trip in Europe or South America without worrying about the finance available.

The beauty behind PCP finance is that you can enjoy zero risk during the term of the agreement. However, before signing up for the contract, it is advisable that you check out the rates offered by a few financial companies to find out if it is worth at the end of the contract. If you find that the rates offered by a few companies are almost the same, then it is advisable to sign up with the first company. However, after taking the final decision, it is advisable that you go for PCP finance with the best possible rate and you can definitely enjoy zero risk along with great benefits.