Before entering into a financing contract, it`s worth making your money – and always reading the fine print. Some financial contracts charge extra fees for cancelling prematurely, so it`s best if you know them from the start. These are detailed in the Treaty. Consider the total cost of financing the car, not just the monthly payment. It is important to compare different payment plans, both for the monthly payment and for the sum of the necessary payments, for example.B. for a credit purchase at 48 months / 4 years and a loan at 60 months / 5 years. Generally speaking, extending the duration of the contract involves lower monthly payments, higher overall financing costs and higher total costs. Make sure you have enough income to make the monthly payment for the duration of the financing contract. You should also consider the cost of insurance, which can vary depending on the type of car you buy and other factors. This is called the “interest rate discount.” However, if you pay the deal prematurely, you don`t save as much interest as for other types of credit. This is due to the fact that, in the case of an HP agreement, it is up to the financial company to decide on the rate discount it grants you.
If you have paid more than half of the HP price of the car and have not defaulted on payment, you can terminate the contract and return the car. You are responsible for the cost of all necessary repairs. If you paid more than half of the HP price, you are not entitled to the refund. If you apply for a PCP plan, the finance company calculates an expected minimum value for your car at the end of the deal. This is called the “guaranteed future minimum value” or gmFV. Your monthly payments are calculated to cover the difference between the price of the car at departure and the GMFV minus a deposit. Many of the “auto finance credits” offered by dealers and some lenders are actually HP deals. The trader acts as an agent for a financial company and earns commissions to arrange the HP for you.
In this case, the merchant acts as a credit intermediary and must be licensed by the CCPC. You can check if they are admitted to our register of credit intermediaries. There is, however, another option; Consider “changing” the car at a dealership, and you can pay the billing number to buy the car from the financial company and then resell that car. .