In order to protect against the growing threat of negative equity at least there are packages in the world of car sales which can offer peace of mind. Personal Contract Plans (PCPs) are naturally growing more popular and over the coming months will become even more so as people work much harder when looking for a funding solution for a new or used car purchase. Consumers will be attracted by lower monthly payments whilst being able to offset a proportion of the cars upfront cost until the end of the agreement. Although these plans have traditionally been more costly and to some people more complicated, they do provide some security in an uncertain world.
For instance the payment terms to achieve a monthly budget are usually very flexible when compared against Hire Purchase or personal loans and with several dealers providing manufacturer driven low rates of APR and flexible deposits these schemes should be compared and judged by customers before deciding on a car purchase. Perhaps the best part, apart from the low rates and affordable monthly payments, is that with finance companies re-adjusting their residual values (guaranteed final payments) the opportunity to retain equity at the end of the term will hopefully give buyers the opportunity to take advantage of not only using this equity as a deposit for the next purchase, but also giving them the advantage of budgeting and avoiding the negative equity trap.
This flexibility also extends to the fact that customers can just return the car at the end rather than having to accept a part exchange price which is unacceptable or worse needing to find cash just to settle the old agreement and complete a new deal.
Currently nearly all car dealers are offering competitive PCP’s;
BMW 1 series, 3 series and 5 series with APR’s as low as 8.5%
VW on Polo, Golf (mk5) and Passat with low rate and low deposit examples and also Toyota, Peugeot and Ford which offer some deals at 1 up front payment as a deposit with payments as low as £150 on some models.
Check out some of these deals ASAP and see if you can bag yourself a bargain whilst keeping a credit line free should you need to borrow for something else during 2009.