NICHE VEHICLE FUNDING
Part of the Niche Automotive Group
T: 01756 699411
Embsay Mills Business Centre
HP + BALLOON?
What is a Hire Purchase car finance deal?
Hire Purchase with a balloon payment is very similar to a standard Hire Purchase agreement, but like a PCP a certain amount of the loan is deferred until the end as a final “balloon” payment to reduce the monthly payments.
For cars with strong residual values, the final balloon can be more flexible than a PCP, which can further reduce monthly payments. The balloon amount is agreed in advance and fixed, but unlike a PCP there is no Guaranteed Minimum Future Value and the final payment has to be settled at the end of the agreement if you want to take ownership of the vehicle. The alternatives are part exchanging or refinancing the vehicle.
Why choose HP car finance?
HP Balloon agreements are ideal for those purchasing collectable or classic cars with strong residual values such as limited production Porsche and Ferrari models. Unlike a PCP, there is no age limit on the vehicle at the end of the agreement.
How does a Hire Purchase and Balloon Payment deal work?
You make an initial deposit – of your choice – and pay for the vehicle monthly until the end of the agreement.
At the end of the agreement, you will need to pay the balloon payment to take ownership of the vehicle, refinance the outstanding balance or trade the car in.
What are the benefits of a Hire Purchase and Balloon deal?
Lower monthly payments than equivalent HP
More flexible final payment than a PCP
A simple way to finance a vehicle purchase
Flexible deposit options at the start
A choice of agreement length based on your own financial circumstances
Fixed monthly repayments
What should I consider before agreeing a HP + B deal?
Once all of the monthly payments have been made, you will need to pay the final balloon payment. Once you have paid this you become the owner of the vehicle. The car can also be part exchanged, with any remaining equity going towards the next vehicle once the finance has been settled.
You also have options to settle the finance agreement part way through the term of the agreement, your finance provider can give you specific details at any time.
Commonly asked questions