Trust Group UK are the leading Volkswagen and Skoda dealers in the Midlands
At Trust Group we can offer many flexible ways to buy your New or Used Volkswagen or Škoda. This page explains the difference in the options you have to fund your new or used car.
Under HP agreements, there's a deposit to pay – typically 10% – followed by fixed monthly payments. The car is owned by the HP company until the final payment – and any 'option to purchase' ownership-transfer fee – has been paid. Up to that point, the person making the payments has no legal right to sell the vehicle.
Customers can settle their finance agreements early and within the initial timescale of the loan, this is called an ‘early settlement’. The finance company will be able confirm any outstanding balance required to settle any vehicle on HP. Once settlement is made the vehicle ownership transfers to the customer having paid the ‘option to purchase’ fee. Most customers choose this option when they look to part exchange their vehicle for a newer model prior to the expiry of the original loan period.
Personal Contract Purchase
Personal Contract Purchase (PCP) . is one of the most popular ways to purchase a new and used vehicle. It offers the flexibility of Hire Purchase with a confirmed Final Residual Value to pay at the end of the agreement. Again as with HP this agreement term can be settled early, normally when a customer chooses to upgrade their vehicle for a newer model.
As with HP there's a deposit to pay, a fixed interest rate, and monthly repayments over a choice of lending terms, which are usually between 12 and 48 months.
At the end of the agreement you can opt for one of three choices:
- Return the car to the supplying retailer
- Keep the car, having paid off the Final Residual Value Payment
- Trade the car in against a replacement,settling off the outstanding Final Payment and using any equity that you may have as further deposit against the new vehicle.
Take a look at the video link below to get a more detailed explanation about PCP and find out why increasingly more customers choose this route as their preferred funding option.
Contract Hire or Leasing
Also referred to as personal leasing, Personal Contract Hire was rated as the fourth most popular car-financing method in the whatcar.com poll. Personal Contract Hire enables you to pay fixed monthly rentals on a vehicle over a period of months (typically 24 or 36 months) after which you will be required to simply hand the vehicle back. In effect you are ‘hiring’ the vehicle for an extended period without any opportunity to own the vehicle or settle off the loan early. This method of funding is particularly popular for business users who are responsible for funding their own vehicle but do not want to take on a more standard HP or PCP agreement.
Maintaining the vehicle during the hire period is the customers responsibility, to help offset this many customers choose to opt for one of our standard maintenance packages which will cover off all routine servicing costs.