Our Finance Types

There are various different types of finance that we offer at Creditas Financial Solutions. Click on an option below for more information about that finance type including the advantages and disadvantages.

A Hire Purchase agreement is a type of borrowing, where you do not own the vehicle until you have paid all monthly payments for the duration of the agreement. Generally, the final repayment will include an option to purchase fee this transfers the title of ownership to you from the lender.  The agreement can be settled at any time during the agreed term, you will need to contact the lender to discuss this

Advantages of a HP product

  • Hire purchase agreements allow a customer to spread the cost of buying a vehicle rather than paying cash up front.
  • HP does not require a large final payment and there are no mileage restrictions as with a PCP agreement.

Potential risks of a HP product

  • Failure to maintain the monthly payments can result in the repossession of the vehicle.
  • Ownership and title of the vehicle does not transfer until all payments including the option to purchase fee has been paid.
  • If the value of the vehicle depreciates faster than expected the customer will still be required to maintain the payments until they take ownership of the vehicle.

A PCP agreement is a car financing loan but differs from a personal loan because you do not have to pay off the full value of the car. The price of the vehicle is usually split into 3 amounts, a deposit, the monthly instalments, and the final optional payment (balloon).  PCP finance could be a good option if you like to change your vehicle regularly, PCP gives you the choice of owning the car at the end of the contract by paying the balloon amount of trading it in, the agreement can be settled at any time during the agreed term, you will need to contact the lender to discuss this.

Advantages of a PCP product

  • Typically, monthly payments on a PCP agreement will be lower than with a Hire Purchase agreement because there is a final payment at the end of the contract (balloon payment).
  • Customer to some extent are protected against depreciation, if the value of the vehicle declines quicker than expected during the loan term the vehicle can be handed back to the finance provider.

Potential risks of a PCP product

  • If you cannot afford to make the final payment (balloon payment) at the end of the agreement you would have to hand back the vehicle or start a new PCP contract.
  • There is an annual mileage limit which would be agreed at the start of the agreement, this will have an effect on the amount you pay, if the annual mileage is exceeded there will be financial penalties.
  • The vehicle must be maintained to a good condition and ensure any damages or scratched bodywork must be put right.

Lease purchase is a form of Hire purchase which allows the consumer to purchase vehicles with a delayed higher payment at the end, sometimes known as a balloon payment. Lease purchase allows you to purchase the whole cost of a car with lower monthly payments over a set period at a fixed payment each month with the ability to defer the potential future value to the final payment along with an option to purchase fee. Lease purchase is typically over a period of 12-48mths.  Deposits can start from 0%.  The cash price, the amount of deposit and the term you choose will determine the monthly payments the finance company can offer.  You set the annual mileage, and this allows the finance company to determine the future value of the vehicle, typically if the vehicle remains in good condition and the mileage is within your contracted allowance you should be able to trade in against your new car or apply for a new agreement to fund the balloon payment.

Advantages of a Lease Purchase product

  • Monthly payments on a Lease Purchase are lower because of the balloon payment at the end of the agreement
  •  No annual mileage restrictions as with PCP

Potential risks of a Lease purchase Product

  • There is no option to hand back the vehicle
  • Ownership and title of the vehicle does not transfer until all payments including the option to purchase fee has been paid.
  • Failure to maintain the monthly payments can result in the repossession of the vehicle.

Contract Hire is a long-term rental/lease agreement between two parties (individual or business, known as the Lessee), to use a vehicle for a set period, which is typically for 2 and 5 years, and for a fixed monthly cost. At the end of the agreement, the vehicle is returned to the company (known as the Lessor), as there is no option to purchase.

As you don’t own the vehicle, you pay for its depreciation within your monthly payments for the lease period, rather than its initial purchase value. The monthly contract hire rental considers: the cost of the car, including vehicle registration fees; road tax; the period of use; agreed mileage; funding costs; and forecast residual value, which is the car’s estimated value at the end of the contract. This can all mean typically lower payments when compared to other finance types and has the added benefit of not needing to take a punt on selling your used vehicle, hoping it hasn’t depreciated much.

Advantages of Contract Hire

  • Flexible terms to meet your finance requirements and driving habits, such as variable contract duration and mileage terms
  • In the long-term, it allows you to use a vehicle that might otherwise be unreachable in terms of its on-the-road (OTR) cost
  • Maintenance of vehicles can be included in the monthly (service) fees, spreading the cost
  • When returning the vehicle at the end of your agreement, you do not need to worry about its depreciation or disposal
  • A low initial rental payment allows you to determine how much you pay for, what is similar way to a deposit, except you don’t get it back at the end of the contract; it is meant to make your monthly payments more affordable
  • Fixed rental costs

Potential Risks of Contract Hire

  • There are several fees/charges that could be expensive, so ensure you check these on your agreement: Early termination; agreed mileage; and excessive wear and tear, and damage. In addition, the vehicle must be insured with full comprehensive cover.

A personal Loan is an unsecured loan, meaning that it is not secured against any asset such as your home or vehicle.  A personal loan can be spread across a time period as agreed with the loan provider, monthly fixed payments are made to clear the loan over the agreed term.  Unlike other vehicle finance agreements the vehicle is owned by you from the start.

For more information about the different types of finance we offer, please don’t hesitate to contact us.

Apply For Finance

Use our finance calculator to get a finance quote. Please note our car finance calculator is for illustration purposes only. The interest rate that you receive from your motor finance provider, or the fees they may charge, can vary significantly depending on your personal circumstances.

More Info

Become a Dealer

With a simple process, your own account manager and our on hand our team of dedicated professionals it couldn’t be easier. As an FCA regulated dealer we can offer the opportunity to directly propose into our automated system and in most cases, we can have a decision within minutes.

More Info

The Creditas Ethos

The Creditas ethos is built around the customer, our ethical approach concentrates on the best financial solution for each individual.