what best when looking at HP or PCP car finance?

Sunday, January 18th, 2009 at 21:44

Tonny asked:

I'm considering getting buy prescription drugs a new or fairly new car and i will have to go down the route of car finance. I think i kind of understand how HP and PCP works but really dont know what the best option is. Can anyone give me any advice on car finance, do's and dont's, what to look for, current finance interest rates that i should be looking for. Any information that you think will be of use really.

I have had only one car since i have been driving and i bought that outright so i dont really know much about getting car finance

Reply:

financing at a flat rate for a fixed term and price is the best for the consumer, go to a bank.
The HP you pay a low rate for the specified term then at the end of the term you can buy the car for current market price, which will likely need to be financed, or you will have to turn it in with a "penalty" the financiers will asses.
The PCP is similar and maybe better, because you don't have the "penalty" at the end, but not all of these financings are the same, so you would have to read the contract before you buy, even if the financier pressures you to sign with out reading.
For the most part, the only way a HP or a PCP are good for you, is if you want a new car every couple of years. I can't recommend buying a car after a HP or PCP, because you will end up paying more for the vehicle than if you just got a standard bank loan. Don't do a HP or PCP for any terms longer than 2 years.

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