Expert Q&A
HOW CAN I FINANCE MY NEW TOW CAR?
Q I plan to change my tow car this autumn. I don’t need help choosing the model, but I would like to know your opinion on whether a personal contract purchase (PCP) or personal contract hire (PCH) agreement would be better.
N Harper
A David Motton replies…
For some years, PCP has been the most popular form of car finance.
Under this arrangement, you pay an initial deposit, then a series of monthly payments. This is cheaper each month than traditional hire purchase schemes, because a portion of the loan is deferred until the end of the contract.
At that point, you can make the final payment to take full ownership of the car, use any equity as a deposit to start a new agreement, or hand the vehicle
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