At Lings Honda, we offer 3 types of Finance; Personal Loan, Hire Purchase (HP) and Personal Contract Purchase (PCP).
As an alternative to paying for your motorcycle up front in a single payment we offer the facility to purchase the bike on finance. These finance products allow you to spread the cost of the motorcycle over a period of time, i.e. 3 years. We offer Personal Loans, Hire Purchase (HP) and Personal Contract Purchase (PCP) finance products, with these products being detailed below:
A Personal Loan, also known as an Unsecured Personal Loan is a loan that isn't secured against any asset. The advance is based on your credit history and ability to repay the loan from personal income. Repayment is usually through fixed amount installments over a fixed term. Beneficially since the loan is not secured on your motorcycle you can change your bike without having to pay off the loan.
Hire Purchase (HP)
A Hire Purchase agreement is very similar to a Personal Loan in so much as you purchase the motorcycle by making installment payments over a period of time. Where the Hire Purchase differs is that the loan is secured against the motorcycle and ownership will not be obtained until the full amount of the agreement is paid.
Personal Contract Purchase (PCP)
A Personal Contract Purchase agreement allows the motorcycle to be leased from a finance company over a fixed term and you then have the option to return or purchase the motorcycle at the end of this contract. So you pay a deposit, a monthly amount for the duration of the PCP contract term and then a final purchase amount should you want to buy the motorcycle at the end of the contract. The Guaranteed Final Value (GFV) is the amount you would have to pay at the end of the agreement should you wish to purchase the vehicle, and this figure is agreed at the start of the arrangement and is subject to a mileage limit. A major benefit of this scheme is that it allows you to keep your monthly payments down, and is often the most beneficial type of finance for those who change vehicle on a regular basis.
Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or a used motorcycle.
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 motorcycle, 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 motorcycle. The balloon payment is often referred to also as the Guaranteed Future Value (GFV).
When you have chosen your vehicle, you will then agree your annual mileage and decide on the agreement term with one of our Business Managers.
We will then determine the Guaranteed Minimum Future Value (GMFV) of the vehicle at the end of the agreement and work out a deposit and monthly amount that works for you.
At the end of your agreement you will then have three options:
Return – Simply return the motorcycle the back to us
Retain – Keep the motorcycle by paying the optional final payment
Renew – Trade it in for another motorcycle
For a quotation, help, or advice contact us and ask to speak to one of our Business Managers.
motorcycleYou can normally settle your agreement early by asking the finance company to provide you with a settlement figure. However, the finance company will require you to pay off the difference between what your is worth, and what you still owe and there may be a difference which is known as negative equity. On the other hand, you may find that at the end of your term your motorcycle is worth more than the Guaranteed Future Value, which means you will have some positive equity to contribute towards your next motorcycle.
Hire Purchase is a way to finance buying a new or used motorcycle. You will normally pay an initial deposit and will pay off the entire value of the motorcycle in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the motorcycle outright.
The short answer is yes, you can end your finance early. There are different provisions within each finance agreement that allows you to do just that. If you have got through two-thirds of the way through your finance agreement, the options to end the finance agreement early open up.
For a Hire Purchase agreement, there is an option of paying it off early through a settlement fee. A settlement fee covers the cost of any remaining unpaid installments and interest payments remaining on the agreement. Once the settlement fee is paid, you take full ownership of the motorcycle early.
Under a Personal Contract Purchase agreement, you can also pay a settlement fee for bringing the agreement to an end early. After that, you can choose to hand the motorcycle back or you have a second option. Through a PCP agreement, you can take full ownership of the motorcycle by paying off the remaining Guaranteed Minimum Future Value also known as a balloon payment.