Financing Options for Electric Cars
With the winds of change propelling more people towards sustainable choices, electric vehicles (EVs) are fast gaining traction in the UK. While EVs promise greener journeys and fuel savings, the initial costs often steer prospective buyers towards financing.
If you’re pondering over obtaining car finance for an electric car, this comprehensive guide will shine a light on your options and guide you through the UK’s finance landscape.
The Surge of Electric Cars in the UK
As Brits increasingly pivot towards sustainability, electric cars are emerging as a favourite. Not only do they diminish one’s carbon footprint, but they also offer potential savings, thanks to lower running costs.
Nevertheless, their higher upfront costs can be a hurdle for many. This is where car financing comes into play.
Navigating the Finance Highway
1. Personal Contract Purchase (PCP) Agreements
PCP stands as one of the most sought-after choices for those embarking on the electric journey.
With a straightforward structure, PCP requires you to put forth a deposit, followed by manageable monthly instalments.
As the agreement culminates, you’re presented with options:
- Return the vehicle.
- Settle the balloon payment and claim the vehicle as your own.
- Trade in the car’s equity to finance another vehicle. The flexible nature of PCP ensures that your financial goals remain unhindered while you enjoy the perks of an electric drive.
2. Hire Purchase (HP) Agreements
HP can be perceived as the more traditional cousin of PCP. While the modus operandi is similar – deposit followed by monthly instalments – the end game is different.
Once you’ve covered all instalments under an HP agreement, the electric vehicle becomes yours. Although the monthly outlays might be more than PCP, the allure of outright ownership draws many towards this option.
3. Finance Lease for Business Vehicles
For businesses aiming to electrify their fleet, finance lease agreements can be the answer. Here, a financing institution procures the car and leases it to the business for a predetermined span.
As the agreement concludes, businesses can either renew the lease or return the vehicle. If you’re considering this option, commercial brokers like The Funding Store provide invaluable insights into asset financing, including for electric vehicles.
Government Incentives: A Push towards Electrification
To boost the adoption of electric cars, the UK government and other global entities offer incentives. From tax deductions to rebates, these incentives reduce the financial burden on both individual and business buyers.
Finding the Perfect Financing Fit
The road to securing car finance is dotted with various factors.
Your credit history, the amount you can deposit upfront, and your monthly earning capacity can influence the interest rates and terms of your agreement.
It’s paramount to explore the market – commercial brokers like The Funding Store can be instrumental in guiding you through your options, including specialised routes like asset finance.
Electrify Your Drive
To sum it up, financing an electric car in the UK is not only feasible but also versatile, catering to diverse needs.
From PCP and HP to finance leases, the choice is expansive. Just remember, while the electric wave is tempting, it’s essential to choose a financing option that aligns with your financial trajectory.
