Car Finance

Hire Purchase (HP) is a finance option offered by Complete Vehicle Management. Simply:

• Pay a deposit (minimum of all the VAT)
• Pay monthly instalments over an agreed time
• Once all payments have been made you will own the car

It is different from other types of borrowing because you don’t own the car until you have paid in full. Under an HP agreement, you hire the car and then pay an agreed amount by instalments. You may settle the agreement at any time.

This is a simple finance option and comes with many benefits:

• Fixed monthly payments suited to your budget
• Available over payment periods between 24 and 60 months
• Able to borrow between £3,000 to £50,000
• The interest rate is fixed and competitive
• Available on cars up to 10 years old at the start of the agreement
• There are no mileage restrictions

Disadvantages of Hire Purchase

• You won’t own the asset until you have made the final hire purchase payment. 
• While spreading the cost of an asset is in most situations a benefit, you have to be willing to commit to the payments for the duration of the term.

Finance Lease (FL) is a finance option offered by Complete Vehicle Management.

Finance lease provides the option for VAT-registered users to pay for cars off balance sheet, spreading the cost of the VAT to the monthly payments rather than requiring payment up front as is the case with a purchase product.

You can choose to lease your car with or without balloon payment due at the end of the initial lease period. Monthly payments will be reduced during the rental if you choose the balloon option.

Once the initial lease period has ended, you will have the option to sell the car on behalf of the finance company and pay them a percentage of the sale price (normally 5%) or extend the lease, paying only a peppercorn rental.

Note that if you choose the balloon payment option to reduce your rental, this will need to be settled as part of either of these options.

Business Contract Hire (BCH) is a finance option offered by Complete Vehicle Management. This is suitable for companies and individuals registered for VAT. The main advantage is that the VAT portion is up to 100% recoverable on a car. This is not a suitable option for an individual who is not VAT registered.

If you're VAT registered, the VAT portion of your payment is 100% recoverable if the vehicle is used solely for business use and can be offset against your company's taxable profits. This figure drops to 50% if the vehicle is also available to the driver for personal use.

The vehicle will be hired for a set period of time – typically between 24 and 60 months – and monthly rentals are set based on agreed mileages.

Other benefits of contract hire include:

• There is no risk of depreciation leaving you with an unexpected cost in the future. With no ownership risk on your part, all you need to adhere to is mileage restrictions and wear-and-tear regulations to ensure your monthly costs are all you will pay.
• There is the option to have all your maintenance costs included in your monthly rental.
• Administration relating to your vehicles is reduced. For example, vehicle tax is renewed automatically.
• Your payment is purely a rental, so it sits off your balance sheet, avoiding being classed as a depreciating asset.

Contract Purchase (CP) is a finance option offered by Complete Vehicle Management. This finance option is suitable for those looking for a car for their business and is a great way to pay monthly payments and have the option to own the car at the end of the agreement.

There are many benefits to Contract Purchase:

• Flexible deposit, mileage and terms to suit your circumstances
• Set payments to suit the business budget
• Fixed payments over the finance term so you know exactly what you need to pay every month
• You can include maintenance in the monthly payment

There are three options at the end of agreement:

1. Pay off the deferred amount in full and keep the van (please note, you do not own the car until you make this final payment)
2. Hand the car back to the finance company
3. Trade the car in against another car

Disadvantages of Contract Purchase:

• The vehicle will not belong to you until you have made all payments due under the contract.
• If you hand the vehicle back and have exceeded your annual mileage you will be charged at the pence per mile as detailed in your agreement.

Personal Contract Purchase (PCP) is a finance option offered by Complete Vehicle Management. This is a flexible finance option for purchasing a car. This is only suitable if you are looking to finance as an individual rather than as a business.

There are many benefits to using a Personal Contract Purchase finance option for your next car:

• Flexible deposit, mileage and terms to suit your circumstances
• Set payments to suit your budget
• Fixed payments over the finance term
• Interest rate is fixed
• Available over payment periods between 24 and 60 months
• Available on cars up to 5 years old at start of agreement

There are three options at the end of agreement:

1. Pay off the deferred amount in full and keep the van (please note, you do not own the car until you make this final payment)
2. Hand the car back to the finance company
3. Trade the car in against another car

Disadvantages of Personal Contract Purchase:

• A charge will be made for excess mileage if the contract mileage is exceeded 
• You will have to make a decision at the end of the contract as to whether you wish to sell the vehicle, return it or keep it.

Personal Contract Hire (PCH) is a finance option offered by Complete Vehicle Management. It is based on a fixed term contract where customers pay an agreed monthly charge for the use of a vehicle for a previously agreed period.

Advantages:

• Flexible initial payment
• Fixed term contract
• Fixed mileage contract
• Fixed cost motoring
• Flexible profiles to suit you
• You only pay for the use of the vehicle
• At the end of your contract simply hand the vehicle back
• Option of including maintenance with the contract
• No depreciation or disposal risk

Disadvantages:

• Vehicle must be returned in a well maintained condition
• Early termination can be expensive
• You must have fully comprehensive vehicle insurance
• You will never own the vehicle

More Information on Personal Contract Hire:

It benefits customers wishing to eliminate the financial risk associated with disposing of a vehicle. Contracts are usually taken over two, three or four years, providing a high level of flexibility. Some contracts can be formally extended beyond the end of contract date if required. Just ask and we can answer any of your questions regarding extending your contract.

PCH is very similar to Business Contract Hire; both are based on a fixed annual mileage agreed on inception of a contract. You will need to decide how many miles you drive each year before quotations can be obtained. Once you have stated how many miles you drive in a year and considered which vehicle you would like to lease a quote can be created for you by one of our sales team.

Regulations with regard to making mileage amendments after contracts are live vary from funder to funder, so it is always better to be as accurate as you can be. If you do exceed the agreed allowance at the end of your contract you will pay an excess mileage charge, which will have been agreed upon prior to signing the finance agreement.

Please remember this when deciding upon you annual mileage. If you are looking to have predictable motoring costs adding maintenance to your monthly payment is easy. Maintenance is there to put your mind at rest should any challenges arise with your vehicle and generally covers servicing, routine maintenance, tyres, exhausts and batteries.

Please note that it is responsibility of the person named on the finance agreement to arrange and pay for fully comprehensive insurance for the vehicle. It is important that the vehicle is returned in accordance with the guidelines set out in the 'Fair Wear and Tear Guide', a copy of which is made available to customers when they are near the end of their PCH agreement.

If you would like to purchase the car outright, you are also able to do this at Complete Vehicle Management, simply ask us for the cash price.