Read our guide on the different ways you can finance your car purchase with AMT. We’ve covered the features and benefits of each finance option so you can make an informed choice.
This handy guide has been put together to give you an overview of the different ways you can finance your car purchase with AMT Auto. We cover a summary of how each finance option works, plus the features, benefits and further considerations for each type of finance arrangement.
A good credit score is crucial in securing better rates and acceptance for car finance. We’ve provided a summary of each finance option so you can make an informed choice.
Car finance is a type of loan that allows you to borrow money to purchase a car and pay it back over time.
Most people don’t have enough money to pay for a car upfront, so car finance provides an alternative. Car finance involves borrowing money from a lender and making monthly payments, usually with interest. The lender will assess your credit history and credit rating to determine your creditworthiness and the interest rate you’ll be charged.
There are three main types of car finance available. All three are differing versions of what is known as a ‘conditional sale’.
They are:
We find that this is the most popular finance agreement with our customers. With a personal contract purchase you pay an agreed amount each month, then at the end of the contract you have three options;
As with all finance agreements, you will need to pass a credit check in order to get the finance agreement in place. This relies upon you having a good credit score and a good credit history.
A PCP contract typically lasts three to five years. As part of the contract, you agree a mileage limit for the term, then pay a deposit upfront, which is typically about 10% of the purchase price to secure the vehicle.
You won’t own the vehicle at the end of the agreement but you can choose to buy it by paying a final payment also known as a ‘balloon payment’. You will know what the balloon payment is going to be upfront as it’s agreed at the beginning of the contract.
You can also choose to end the deal without buying the car outright.
A hire purchase (HP) plan is a very popular and flexible way for people to acquire the vehicle they want immediately and to take ownership of it once the value has been fully repaid. Hire purchase is similar to a bank loan that is secured against the value of the car, as once the monthly repayments have been completed you will own the vehicle.
You will pay a deposit to secure the vehicle – typically 10% of the vehicle’s price – and then your repayments will be calculated based on this figure, the remaining value of the vehicle and the length of the repayment term.
Once all the repayments have been completed, you will become the legal owner of the vehicle.
A lease purchase can be the ideal option for people who would like to own a vehicle but who can’t afford a large capital outlay upfront to do so.
Unlike a PCP agreement, a lease purchase agreement does not include maintenance. The monthly cost that you pay is the difference between the retail value and the depreciation of the vehicle plus interest.
This type of finance arrangement is therefore ideal for vehicles that hold their value.
As part of your contract, you pay monthly instalments which cover the difference between the value of the car at the start and the end of the contract.
When the lease purchase ends, you have two options:
With part exchange, you make the balloon payment then lease a newer car.
Once you’ve got a car finance agreement, it’s essential to manage your repayments responsibly. This includes making regular payments, keeping track of your credit score, and avoiding missed payments.
You should also review your finance agreement regularly to ensure you’re on track to meet your repayments.
Choosing the right car finance option depends on your individual circumstances and needs. Some might even consider taking a personal loan (classed as an unsecured loan) to buy a car outright, although this tends to result in higher monthly payments.
Consider your credit rating, financial commitments, and ability to make monthly payments. You should also research and compare different finance options to find the best deal for you.
It’s essential to read the terms and conditions of any finance agreement carefully before signing.
AMT Auto can arrange your car finance in-house to make sure that buying a car with us is as straight-forward as possible. If you’re looking to finance your next car purchase, then let us know and one of our team can take you through the different finance options available to you.
At AMT Auto, we redefine convenience with vehicle solutions designed for both businesses and individuals.
No matter the vehicle or the duration, we’ve got you covered with our exceptional services.
Discover flexible car leasing, car rental, used cars to buy, or subscribe to a car or van with us—you can even sell your current car for the best price. For businesses needing consultancy on fleet management or a partner to supply vehicles to customers, we’ve got it all under one roof.
AMT Global Investments Ltd - Registered in England and Wales No: 05904790. Please note: Whilst every effort has been made to ensure the accuracy of the vehicle information and images, some errors may occur. It is important that you do not rely solely on the information, images or prices shown but confirm with AMT regarding any items that may affect your decision to rent, lease or buy a vehicle. Registered Address: AMT House, 174 Armley Road, Leeds, LS12 2QH, Tel: 0113 387 4240.
