There are many ways to pay for your prestige car. Cash, loan, lease or finance. Car finance packages allow you to borrow money to buy your prestige car, paying all or part of it back over a period of time. By choosing the right finance deal, you can drive the car you want without tying up large amounts of your cash.
Repayments are usually a fixed amount, paid in monthly instalments, and will include interest and arrangement/admin fees. You must continue to make payments until the completion of your finance agreement or you may risk losing your car.
Depending on the type of finance contract, at the end of your deal, there are several different alternatives. With a HP deal, you’ll own the car outright. A PCP deal will give you the option to return the car to the dealership or pay a final balloon payment for full ownership. A car bought using lease purchase requires a compulsory final balloon payment after which the car is yours.
Not all finance deals require you to pay a deposit. However, the larger the deposit you pay, the lower your monthly instalments will be. In most cases, you can use the value of your current car as a deposit, i.e. part-exchange or trade-in.
Prestige car finance contracts usually last between 2 and 5 years. The longer the term of the agreement, the lower your monthly repayment cost. The length of the contract can be adjusted to find a monthly instalment to suit your budget.
The Financial Conduct Authority (FCA), which regulates lending in the UK, requires that providers look at your credit history, including income and employment status, to ascertain whether you’re in a position to be able to repay the loan. These checks will also flag any potential overcharging by the finance provider.
As with all car finance applications, you’ll be required to provide the following:
This information helps the finance company to calculate their risk in lending your required amount, and the likelihood that you’ll be able to afford to repay the loan.
As long as your credit history permits, you could be able to borrow any amount up to £3 million, using one of Forza Finance’s wide range of specialised car finance providers.
Different finance options suit different circumstances and will depend on several factors, including budget and whether it’s important that you own the car outright at the end of the contract.
Generally, Hire Purchase (HP) splits the entire cost of your car over a number of regular payments, allowing you full ownership at the end of the contract.
Personal Contract Purchase (PCP) splits the depreciation in the value of your car over a number of monthly payments, after which you can return the car (in good condition) or make a one-off, larger, optional balloon payment (Guaranteed Future Value or GFV) to fully acquire the car.
Lease Purchase usually provides no option to return the car to the dealership at the end of the lease period, with the final balloon payment (GFV) being compulsory.
The finance company will charge interest on the money they lend you to buy your car. This will be added to your repayments in the form of APR (Annual Percentage Rate) and included in your monthly instalments. Often, a ‘representative APR’ is quoted in finance offers to provide a rough idea of costs but you should get an accurate APR figure before committing to any finance contract.
As with all car finance, you’ll have to abide by any terms associated with your agreement. For example, a PCP contract will cap the distance driven annually, with a ‘per mile’ payment required for any miles exceeding this limit. Make sure you read the terms of your contract before signing up.
Getting a HPI check on any used vehicle before you buy it will ensure that there is no outstanding finance on your prospective new car, which could result in you being fined for missed payments or having your car recovered by the finance company. A HPI check will also confirm that the car hasn’t been stolen or written off and, in most cases, will also give details of its MOT history. All good lenders or dealerships will be happy to carry out a HPI check for you.
You can request a settlement fee from your finance provider at any time. Although this will incur an admin fee, this figure should be less than the total of the remaining payments as it won’t include upcoming interest.
Buying a prestige car when you already have finance on another vehicle shouldn’t be a problem. Paying off the settlement figure to your existing provider will allow you to then apply for new car finance. You can then carry on with a finance application in the normal way.
You might be able to add some or all of this settlement amount to your new finance arrangement so that you are left with one easy payment and your preferred car.
You can apply for prestige car finance at Forza Finance in 3 easy steps. Pick your car, set your budget and contract length, then click Apply Now! If you need help with any of these stages – from finding your perfect prestige car, to searching out the most competitive loan agreement – just get in touch with our friendly, expert team who’ll get you on the road in no time.