Frequently Asked Questions

There are 3 main finance products that we offer when someone is buying a new or used car, these are Hire Purchase (HP), Lease Purchase (HP with a balloon) and Personal Contract Purchase (PCP). We also offer Equity Release and Re-Financing for when someone already owns a vehicle and is looking to free up some capital or when an existing finance agreement is coming to the end of it’s term.

The best option for this tends to be Lease Purchase or PCP. With a significant amount of the total repayment deferred to the end of the agreement this means there are lower monthly repayments for the duration of the agreement but with the final payment, known as a balloon payment, to pay off at the end of the agreement when you come to sell the car or trade the car in.

The main benefit of choosing Hire Purchase is that you are effectively paying off the amount borrowed more quickly which means you will be in a stronger equity position if you decide to sell the car. If you do keep the car for the full duration of the agreement this will result in you owning the car rather than having to pay a final balloon payment. Although the monthly payments tend to be higher you will likely pay less overall interest than you would with Lease Purchase or PCP as you are not deferring an amount of capital until the end of the agreement. One other benefit is that Hire Purchase does not have mileage restrictions which on a PCP agreement can lead to financial penalties.

The main difference between PCP and Lease Purchase is that on a PCP there is a “Guaranteed Minimum Future Value” (GMFV) and therefore the final payment is optional. If the value of the car is less than the GMFV you can just hand the keys back to the dealer and not pay the final payment (subject to potential excess mileage charges) whereas with Lease Purchase you will either need to sell the car, part-exchange it, pay off the final balance to become the legal owner or there is also the option to re-finance the car.

No - vehicle leasing, sometimes known as “Contract Hire”, is a very different type of agreement with the main difference being you do not have the option to sell the car or purchase the car at the end of the agreement, you have to return the vehicle.

At the end of the agreement you have three options:
1. Retain the car: simply pay the Guaranteed Future Value, and the car is yours.
2. Renew the car: choose another car, using any excess part exchange value that is above the Guaranteed Future Value towards your deposit.
3. Return the car: there’s nothing more to pay if the car is in good condition and within the agreed mileage terms.

We will start by taking your details for the finance proposal which can be done over the phone or via email and shouldn’t take longer than 10 minutes to fill out the form. Once we have your proposal details the process will usually take around 2 hours before the finance company make their decision on whether to lend the money. The process can take a little longer if any further information is requested by the lender. On average it takes 2 days from the proposal for the finance company to release the funds.

Once we have agreed the suitable product and you have decided you are happy to proceed, then we will apply to one of our lenders and at that stage a credit search will be carried out.

It is predominantly based on the amount you are borrowing as to whether finance companies are happy to let you sign documents remotely. It can also vary depending on the type of agreement and which finance company is lending the money but there will be instances where the finance documents can be signed remotely.

APR stands for annual percentage rate. Whereas the “interest rate” is the actual cost of borrowing the money, an APR includes within it’s charge any additional costs and fees in arranging the loan.

The vast majority of the finance agreements we offer are on fixed rate agreements where the interest rate is fixed and you’ll know exactly how much interest you will pay over the course of the agreement. Variable rate agreements are possible and tend to be most attractive when interest rates are falling so are not as popular in the current economic climate.

As a rule of thumb you should expect to pay around 10-20% of the car’s value as a deposit to get a finance deal agreed by the finance company but there are occasions where they will allow less and there may be occasions where they will require a higher deposit.

This will depend on the type of agreement that you get. In general if you go for a Hire Purchase agreement then there will be no mileage restrictions whereas a PCP where you have a guaranteed minimum future value you will more than likely have a restriction on the mileage you are allowed to do and if you exceed this you will get a financial penalty in the form of a pence per mile.

This depends on the lender but we will make sure any fees are made clear to you once we have a formal offer of terms from the lender and then it would be your decision should you not wish to proceed.

We offer both regulated and unregulated agreements. Regulated agreements are regulated under the consumer credit act 1974 which gives consumers a certain level of protection. Unregulated agreements apply to entities such as limited companies and the protection is not as high. We endeavour to advise each client as to the specifics should they be signing an unregulated agreement. One of the other differences is that unregulated agreements do not need to be signed on trade premises.

You are able to settle the finance early as long as you pay off the agreed amount of the settlement figure provided by the finance company. The amount will include any early settlement charges as set out in the original agreement. In a regulated deal the early settlement charge tends to be 58 days worth of interest whereas in an unregulated deal the amount of interest can tend to be higher so it’s important you are clear as to which agreement is suitable for you before signing the finance documentation.

If you are selling to a dealership then most of the time the dealership will settle the finance for you and pay you the balance. If you are selling privately then this can be a bit riskier so we would advise if possible to pay off the finance yourself first before selling the vehicle. If you are part-exchanging your vehicle for a new car then in some cases the finance company will “contra” the settlement and use any equity you have in the car as part of the deposit for the new finance agreement and the finance will effectively move from one car to the next. Motor dealers should be regulated by the Financial Conduct Authority so it is strongly advised that you should always check the dealers FCA number against the FCA register to ensure they are authorised to settle your car. www.register.fca.org.uk

The preference is that you are purchasing a car from a motor dealer as this gives added protection in the event the vehicle is not fit for purpose. We will consider some private sales but this is very much viewed on individual circumstances.

Yes we do. Slightly different lending parameters apply and there are fewer lenders that operate in this area of the market but we most certainly can offer terms for these types of vehicle.

We can only finance individuals that have a residence in the UK and a UK bank account.

Phone Number – 02039 930 025
Email – info@elev8finance.co.uk
Or use our Contact Us form here: https://www.elev8finance.co.uk/contact-us/