Buying a used car was historically fraught with danger, but the rise of finance leasing deals means many three-year-old cars can be safely snapped upOver the past three years consumers have increasingly been relying on credit to fund new car purchases, with nearly nine out of 10 private vehicles bought this way during 2016, according to the Finance & Leasing Association. The rise of the personal contract purchase (PCP), which lets you buy, say, a new Ford Fiesta for as little as £150 a month and a small deposit, is largely behind the boom in cars sales in Britain. But with a lot of three-year PCP deals coming to an end in 2017, it might be a good time to pick up an ex-finance bargain.Under most PCP schemes the driver makes monthly repayments for three years before being presented with three options: either make a `balloon` payment and take legal ownership of the car; trade it in and use any equity as a deposit for another new car; or return the car to the dealership. If it is traded in or returned the dealership usually approves the ones in the best condition to re-sell. The rest are disposed of via an auctioneer, such as British Car Auctions (BCA), to a secondhand dealer or a private buyer (see box below), opening up the opportunity for bargain seekers. Continue reading...
|
