Demands & Needs

DEMANDS AND NEEDS

We are required by the FCA to determine which of our finance products are best suited to you.

Customer Name:

Vehicle Reg & Model:

Is the vehicle for private or business?

What is your expected annual mileage?

How much deposit are you looking to put down?

Is there any finance outstanding on your Part Exchange, if yes how much?

What is your monthly budget for this car?

Do you have a preferred type of finance method you would like us to quote?

Is there any other important information you would like us to consider?

TYPES OF FINANCE

HIRE PURCHASE (HP) OR CONDITIONAL SALE
A Hire Purchase agreement is a type of borrowing, where you do not own the vehicle until you have paid all monthly payments for the duration of the agreement plus an option to purchase fee which is typically included in the final payment. With Conditional Sale the ownership of the vehicle transfers to the
customer once all the repayments have been made. The agreement can ve settled at any time during the agreed term, you will need to contact the lender to discuss this.
Advantages of a HP / CS product
• Hire purchase & Conditional Sale agreements allow a customer to spread the cost of buying a vehicle rather than paying cash up front.
• HP & Conditional Sale agreements do not require a large finance payment and there are no mileage restrictions as with a PCP agreement.
• The customer can hand the car back to finance company, without any further liability once half of the Total Amount Repayable has been paid (subject to condition of the vehicle).
Potential risks of a HP / CS product
• Failure to maintain the monthly payments can result in the repossession of the vehicle.
• Ownership and title of the vehicle does not transfer until all payments (including the option to purchase fee for HP) have been paid.
• If the value of the vehicle depreciates faster than expected the customer will still be required to maintain the payments until they take ownership of the vehicle.
PERSONAL CONTRACT PURCHASE (PCP) - AVAILABLE FOR CARS UP TO 89 MONTHS OLD
A PCP is a car finance agreement which is for a fixed number of repayments followed by a large balloon payment referred to as the Guaranteed Minimum Future Value (GMFV). The monthly payments on a PCP will be lower than a HP agreement of the same term due to the balloon payment at the end. The price of the vehicle is usually split into 3 amounts - a deposit, the monthly installments, and the final optional payment (GMFV), PCP finance could be a good option if you like to change your vehicle regularly. The agreement can be settled at any time during the agreed term.
At the end of the initial term, you have 3 options
1) Pay the settlement figure (GMFV) to the finance company an keep the car.
2) Hand the car back to the finance company without any further liability (subject to mileage and condition of the car).
3) Part exchange the vehicle for a new car and start a new agreement. The new dealer will work out a value for your vehicle and structure a new deal including the settlement of your outstanding finance.
Advantage of a PCP product

• Typically, monthly payments on a PCP agreement will be lower than with a Hire Purchase agreement because there is a final payment at the end of the contract (balloon payment).
• Customers to some extent, are protected against depreciation. If the value of the vehicle declines quicker than expected during the loan ter, the vehicle can be handed back to the finance provider at the end of the loan term.
• The customer can hand the car back to the finance company, without any further liability, once half of the Total Amount Repayable has been paid (subject to the vehicle being maintained in good condition).
Potential risk of a PCP product
• If you cannot afford to make the final payment (balloon payment) at the end of the agreement you would have to hand back the vehicle or start a new PCP contract.
• Failure to maintain the monthly payments can result in the repossession of the vehicle.
• There is an annual mileage limit which would be agreed at the start of the agreement. This will affect the GMFV and your monthly repayments. If the anticipated annual mileage is exceeded there will be financial penalties if the customer choses to hand the car back to the finance company at the end of the term. The value of the vehicle may be less than the settlement figure if the annual mileage has been exceeded, which means that the customer may have to pay a shortfall when trying to part exchange the vehicle.
• The vehicle must be maintained to a good condition and the customer must ensure any damages or scratched bodywork must be put right before handing the car back to the finance company.