Choosing the right finance agreement for you can be difficult, so we’re here to make it easy for you.
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Personal Contract Purchase (PCP)
Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or used car. It is similar to a Hire Purchase agreement as you will usually pay an initial deposit, followed by monthly instalments over a term typically between 18 to 48 months.
What makes PCP different to Hire Purchase (HP) is that your monthly instalments are paying off the depreciation of the car, and not its entire value, over the course of the term. Then, when you get to the end of your agreement, there is a final, balloon payment that must be made if you want to keep the car.
Contract Hire (CH)
Contract Hire agreements are available for business customers and are ideal for customers simply wanting to pay a fixed monthly rental for the vehicle, change it on a regular fixed period and have no disposal risk.
You first choose your new Volkswagen, pay an initial rental in advance, followed by fixed monthly rentals to suit your budget. You can even choose an optional maintenance package as part of your agreement which can help take away the hassle of keeping your vehicle in good condition.
It’s different from Personal Contract Purchase (PCP) and Hire Purchase (HP) because there is no option to purchase the car at the end of the agreement and the vehicle must be returned.
Hire Purchase (HP)
Hire Purchase is a simple and straightforward way to finance your Volkswagen van.
If you're keen to buy your Volkswagen, you have the option to finance it during a period that suits you. If you break it down into monthly payments over time, it's much more manageable than you might think and our fixed interest rates mean you'll know exactly what you're paying from the start.
Once you have chosen your Volkswagen van and decided on your deposit, you just need to choose a repayment period between 12 and 60 months. Once you have paid all repayments and the option to purchase fee, the vehicle is yours to keep.
Lease Purchase is suited to customers seeking long-term ownership, whilst looking to reduce their monthly repayments. Deferring an agreed amount to the end of your agreement allows you to reduce your monthly repayments. Deposits can be as little as one monthly payment.
Once you have chosen your vehicle, you need to work out how much you can afford as an initial payment, how long you want your agreement to be, and how many miles you drive each year.
This is then used to calculate your monthly payments and final balloon payment.
When your agreement comes to an end you need to pay the final balloon payment in order to keep the vehicle, or trade in your vehicle to contribute towards paying off the balloon payment.
Lease Purchase is different to Solutions PCP as your final payment is not optional, meaning you have less options at the end of your agreement.
There are two types of Finance Lease – full payout or balloon repayment.
Finance Lease full pay out is a rental agreement that gives you the opportunity to share in the sales proceeds at the end of the agreement. At the end of your agreement you have two options. You can enter into a secondary rental period, paying an annual rental and retain the use of your vehicle, or you can sell the vehicle on behalf of Volkswagen Commercial Vehicle Financial Services to a selected third party and receive a percentage of the sales proceeds.
Finance Lease ‘balloon’ repayment offers lower monthly rental payment than a full pay out agreement. At the end of your agreement, you may sell the vehicle on behalf of Volkswagen Commercial Vehicle Financial Services to a selected third party and then settle the final ‘balloon’ repayment. You can then share in any excess sales proceeds. Or you can settle the ‘balloon’ repayment and then enter into a secondary rental period, paying an annual rental and retain the use of your vehicle.