Finance Options at Trenton

Here at Trenton, we understand that purchasing a vehicle doesn’t always come cheap. That’s why we work tirelessly to provide money saving special offers and provide you with affordable rates of financing that will help spread the cost into manageable repayments. Our financing schemes - Personal Contract Purchase and Hire Purchase - are detailed below and both provide you with the opportunity to benefit from flexibility and value for money.


What is Personal Contract Purchase (PCP)?

Personal Contract Purchase - or PCP - is an affordable means of getting behind the wheel of a new vehicle every few years. After selecting your model, you will be able to pay an initial deposit and agree a length of term. A member of our sales team will calculate the Guaranteed Future Value of the vehicle at the time your agreement comes to an end. You will then be required to pay off the difference between the sale price and the Guaranteed Future Value through fixed monthly repayments.

At the end of the agreed term, you will have the option to return the vehicle to us, take out a new financing package, or pay the full Guaranteed Future Value in order to become the full owner. Such flexibility is what makes a PCP arrangement such a popular option, enabling you to change models on a frequent basis.

Your options at the end of the agreement;

I.Renew – you can part exchange your vehicle at a dealership and start over again. If the vehicle is worth more than the Final Optional Payment, you can use the difference as a deposit

II.Retain Ownership – You may prefer to keep the vehicle, to do this you are required to pay the Optional Final Payment in full. Some finance providers will allow this value to be refinanced at the prevailing interest rate.

III.Return – If your needs or requirements have changed you can hand the car back to the dealer with nothing more to pay (subject to mileage and condition. Excess mileage charges may apply)


BENEFITS

  • Fixed regular payments
  • You have the option of ownership of the vehicle at the end of the agreement •Variable deposits and periods available, usually between 2 and 3 years
  • Once you have paid a half of the total amount payable you are able to exercise your legal rights and voluntary terminate the finance agreement by handing the vehicle back to the finance company (maybe subject to fair wear and tear)
  • Satisfactory quality rights under the Consumer Credit Act are provided, meaning the credit provider may be liable for putting things right providing the cash price was less than £30,000
  • The ability to repay additional amounts in to agreement and have the interest recalculated, meaning that you could lower your monthly repayment amount


CONSIDERATIONS:

  • A significant proportion of the credit is deferred until the end of the period which will need repaying should you decide to own the vehicle
  • The interest on the final payment is calculated differently to the body of the credit as no capital is reducing
  • The vehicles resale value may not be worth more than the final payment, meaning that your deposit may be reduced for your next vehicle. Therefore, you should be prepared for higher repayments
  • A ‘Fair Wear & Tear’ clause will apply if the vehicle is returned at the end of the agreement and may apply in the event of Voluntary Termination
  • You do not own the vehicle outright until the final payment is made
  • Your vehicle is at risk of repossession if you do not maintain the contractual repayments
  • Agreed mileage limits are imposed at inception
  • Excess mileage charges apply
  • You must maintain fully comprehensive insurance throughout the term of the agreement •You must not sub lease or rent the vehicle to a third party
  • There may be restrictions on usage of the vehicle during the term of the agreement
  • Charges may apply for late payments or to alter the repayment date (these are detailed in the SECCI)
  • Any outstanding finance must be settled if the goods are sold

How does PCP actually work?​

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When you have chosen your vehicle, you will then agree your annual mileage and decide on the agreement term with one of our Business Managers.

We will then determine the Guaranteed Minimum Future Value (GMFV) of the vehicle at the end of the agreement and work out a deposit and monthly amount that works for you.

At the end of your agreement you will then have three options:

Return – Simply return the car the back to us 
Retain – Keep the car by paying the optional final payment
Renew – Trade it in for another car

For a quotation, help, or advice contact us and ask to speak to one of our Business Managers.

What are the advantages of PCP?

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  • Monthly payments on a car financed by PCP are usually lower than if your car is financed by a Hire Purchase agreement.
  • If you decide not to buy the car, you can simply walk away when you've made all the payments.
  • Similar to PCH, you can drive away a new or used car every few years (dependent on the chosen term) without worrying about selling it on.
  • If your car is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new car.

What should you consider when option for a PCP?

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  • If you want to buy the car you will need to pay your final balloon payment (the Guaranteed Future Value).
  • Similar to PCH, you will need to agree on a mileage allowance at the beginning of your contract and there may be excess mileage charges if you exceed this.
  • You won’t be able to sell the car without settling the finance.
  • You won’t own the car until you have made all of your repayments.
  • You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.

Can I settle my PCP agreement early?

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You can normally settle your agreement early by asking the finance company to provide you with a settlement figure. However, the finance company will require you to pay off the difference between what your car is worth, and what you still owe and there may be a difference which is known as negative equity. On the other hand, you may find that at the end of your term your car is worth more than the Guaranteed Future Value, which means you will have some positive equity to contribute towards your next car.

What is Hire Purchase (HP)?

Hire Purchase is arguably the most straightforward vehicle purchasing plan available. Such an arrangement sees you paying an initial deposit followed by fixed monthly repayments that cover the outstanding balance. At the end of the agreed term, you will become the outright owner of the vehicle and be free to do with it as you please. The advantages of such a scheme are plentiful, with the chance to spread the cost of purchasing into fixed, manageable amounts, resulting in the complete ownership of the model. You can learn more about the financing options that are available with Trenton by liaising with a member of the team today. We’ll be happy to answer any questions you may have and help tailor a quote to suit you.


BENEFITS:

  • Fixed regular payments
  • You are the ‘registered keeper’ of the vehicle with ownership of the vehicle transferred to you at the end of the agreement once the option to purchase fee has been paid
  • Variable deposits and periods available, usually in monthly increments from 12 to 60
  • Once you have paid a half of the total amount payable you are able to exercise your legal rights and voluntary terminate the finance agreement by handing the vehicle back to the finance company (maybe subject to fair wear and tear)
  • Satisfactory quality rights under the Consumer Credit Act are provided, meaning the credit provider may be liable for putting things right providing the cash price was less than £30,000
  • The ability to repay additional amounts in to agreement and have the interest recalculated, meaning that you could either lower your monthly repayment amount of shorten the term


CONSIDERATIONS:

  • A ‘Fair Wear & Tear’ clause may apply in the event of Voluntary Termination
  • You do not own the vehicle outright until the final payment is made
  • Your vehicle is at risk of repossession if you do not maintain the contractual repayments
  • You must maintain fully comprehensive insurance throughout the term of the agreement •You must not sub lease or rent the vehicle to a third party
  • Charges may apply for late payments or to alter the repayment date (these are detailed in the SECCI)
  • Any outstanding finance must be settled if the goods are sold

What are the advantages of HP?

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  • You’ll be able to drive away a car that you may not have managed to buy outright.
  • Unlike a PCP or PCH contract, you won't need to estimate your mileage at the start of your Hire Purchase agreement, so you'll avoid excess mileage charges.
  • Once you’ve made your final monthly payment, including the option to purchase fee, you'll have full ownership of the car.

What should you consider when opting for HP?

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  • Monthly payments may be higher than some other finance options, such as PCP, as you're paying off the full value of the car.
  • You won’t be able to sell the car without settling the finance.
  • You won’t own the car until you have made all of your repayments.
  • You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.

Can I settle my HP agreement early?

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The short answer is yes, you can end your finance early. There are different provisions within each finance agreement that allows you to do just that. If you have got through two-thirds of the way through your finance agreement, the options to end the finance agreement early open up.

For a Hire Purchase agreement, there is an option of paying it off early through a settlement fee. A settlement fee covers the cost of any remaining unpaid instalments and interest payments remaining on the agreement. Once the settlement fee is paid, you take full ownership of the car early.

Under a Personal Contract Purchase agreement, you can also pay a settlement fee for bringing the agreement to an end early. After that, you can choose to hand the car back or you have a second option. Through a PCP agreement, you can take full ownership of the car by paying off the remaining Guaranteed Minimum Future Value also known as a balloon payment.