A car can be owned in multiple ways such as Car Loan thanks to modern business and the numerous schemes it has got for people. And that’s done for a greater cause, though. You can access more features and options to deal with something, and that gives you the best of probabilities to make sure your usage of a car is efficient, and you get to make the financial charges much more lucid to your benefit.
That being said, it is time for us to get in touch with PCP and learn why car financing through a simple car loan and bringing that vehicle home (owning it, of course) is always a greater and healthier idea than PCP.
What Is PCP?
PCP stands for Personal Contract Purchase.
It is almost like a car hire procedure where you pay to keep the car to yourself and use it for a certain period of time in exchange for car financing or steady instalments.
Although it sounds pretty simple, it is quite complicated to understand given way these instalments work and the choice you want to make with them.
Knowing all f it, you might not like the offer of PCP (no offence!).
In that case, a plan B is always available with no deposit car finance deals from direct lenders. The good news is that you even get them a bad credit score.
But you need to learn things about these options too.
So, without further ado, let us first get to know the basic definition of PCP.
In a Personal Contract Purchase, you are given the opportune t drive a car and keep it (but not own it) in exchange for set monthly instalments. You can purchase the car and make it your own when you make a lump sum payment, known as a balloon payment, at the end of the instalments. You can again choose to return the car and go for a new one or go ‘carless’.
It sounds flexible enough. But it has its problems too.
Scroll down to know them.
Things about PCP You May Not Like
Due to the fact of using the car almost as a rented vehicle makes these issues come into existence, as suggested by car finance experts and many who follows or followed the PCP method.
- PCP might charge you higher rates than other car finance options.
- You cannot be the legal owner of the car, yet you might be asked to pay for damages or repair if you cause that.
- You cannot sell the car or make changes to it, such as upgrading it.
- If you want to avoid large payments, you will think of returning the car, which is something you wouldn’t want otherwise.
- Your car lender can repossess the vehicle if you fail to make payments.
- The final balloon payment might be significantly higher than you thought it would be.
- You will have restrictions on mileage.
So, you see, you wouldn’t like PCP unless you have some contractual operations with a car. If you want to own a car, then purchasing would save you.
Why a Car Loan from a Direct Lender
It is always going to be easier if your instant car finance decision finds a lender.
Direct lenders offer car loans without collateral, which means most of the deals you get unsecure car finance deals.
- You earn freedom by using the money in your own ways.
- Added to that, you can avoid balloon payments.
- You will not miss an offer or a discount since the car loans may offer to you within a single day.
- Poor credit score won’t stop you from getting a deal of this kind.
- Plus, you will get flexible interest rates actually to customise your instalments and loan terms.
Above all, you will get to own a car.
Use the same tactics to find direct lenders as you did for finding your car.
Compare services from lenders and check testimonials. Finalise some of them and speak with them to understand the specific traits of their services given to borrowers.
Then pick a suitable lender and get that car home.