At ABL Prestige Ltd we offer finance on prestige, sports and classic vehicles
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At ABL Prestige Ltd we are able to provide a number of finance products. We utilise a consultative sales process where you the customer is at the heart of everything that we do. Using our years of expertise we are here to provide you with a product that allows you to drive the car of your dreams.
Personal Contract Purchase
Personal Contract Purchase or more commonly known as a PCP is very similar to a Hire Purchase product.
However with a PCP there is an element of the lending that is offset to the end of the agreement and this is called the Guaranteed Minimum Future Value (GMFV/Balloon). This GMFV is set at the start of the agreement by the Lender and is based on a number of factors, notably vehicle, model, age and current/expected term mileage of the vehicle.
A customer taking out a PCP would look to put around 10-20% deposit in at the start and the term is usually around 36-48 months. Cars tend to be no more than 4 years old at the start of the Agreement.
At the end of the Agreement there are 3 options available
1 Hand the vehicle back if the vehicle is worth less than the GMFV*
2 Pay the GMFV and retain the vehicle
3 Trade the vehicle in and utilise any equity in the vehicle (not guaranteed)
* subject to contractual requirements notably excess mileage penalties and fair wear and tear requirements
PCP’s are a great way to protect against Negative Equity and can be provided on vehicles both New and Used (typically up to 4 years old) and provide a fixed lower monthly cost when comparing to Hire Purchase.
Hire Purchase is a traditional way of funding a vehicle purchase. Typically a borrower would put down a 10-30% deposit and then look to take the lending over 36-60 months. At the end of the agreement and subject to all payments being made the car is the customers.
Hire Purchase is a great way to fund the purchase of a car if you are looking to retain ownership at the end of the agreement. The overall costs in terms of interest are typically cheaper when comparing a like for like PCP or Hire Purchase with Balloon
Hire Purchase with a Balloon
A Hire Purchase with Balloon (also known as a Lease Purchase) is very similar to a Hire Purchase and a PCP. However unlike PCP the Balloon isn’t guaranteed by the lender and there is no hand back option at the end of the agreement. The Balloon is agreed with the Lender at the start of the agreement utilising similar information as a PCP however there is also usually some manual underwriting of this process.
As the Balloon isn’t Guaranteed we tend to only offer it on vehicles that offer usually strong Residuals. Ie a Rare sports car or classic car being a perfect example however as we have great relationships with our lenders we are able to discuss each case individually.
Balanced Payment or Variable Rate Lending is only available to Business Owners and/or High Net Worth Individuals. This is because unlike Hire Purchase and PCP these agreements aren’t covered by the Consumer Credit Act.
Unlike a Hire Purchase or PCP Agreements Balanced Payment lending is based on a variable interest rate. The interest rate it tracks is typically the Finance House Base Rate, LIBOR or Bank of England depending on each lenders specific requirements.
Although the monthly payments are fixed, at the end of the agreement a balancing payment is required to take into account of any variation in interest. This may result in a payment required to/from the customer.
Typically Balanced Payments are used for a more complex lending requirements or where a customer is looking for a much more bespoke offering.