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HOW DOES PAY AS YOU DRIVE FINANCE WORK?

Pay As You Drive car finance is a form of Hire Purchase (HP) agreement that requires an initial deposit (around 10%) followed by a set number of monthly payments. The difference is that the finance lender will install a black payment reminder device in the car.

This device will flash red as a reminder three days before payment is due. Once you've arranged payment and it's cleared, you'll receive a code to enter into the box which will return the light to green. You will be able to use the car for the next month until the next payment is due.

For more information, you can read our in-depth Pay As You Drive finance guide.

Car Value £1,995 Pay As You Drive Example

  • Deposit - £200
  • Loan - £1,795
  • Term ( Months ) - 18
  • Charges - £543
  • Arrangement Fee ( upfront ) - £0
  • Arrangement Fee ( spread ) - £200
  • Option Fee - £50
  • Total Charges - £793
  • Loan + Total Charge - £2,588
  • Deposit - £200
  • Loan + T.C. + Deposit - £2,788
  • A.P.R. - 61.9%

First Repayment - £141
16 Other Repayments - £141
Final Repayment - £191

Car Value £2,995 Pay As You Drive Example

  • Deposit - £300
  • Loan - £2,695
  • Term ( Months ) - 18
  • Charges - £813
  • Arrangement Fee ( upfront ) - £0
  • Arrangement Fee ( spread ) - £200
  • Option Fee - £50
  • Total Charges - £1,063
  • Loan + Total Charge - £3,758 Deposit - £300
  • Loan + T.C. + Deposit - £4,058
  • A.P.R. - 54.9%

First Repayment - £206
16 Other Repayments - £206
Final Repayment - £256

Car Value £3,995 Pay As You Drive Example

  • Deposit - £400
  • Loan - £3,595
  • Term ( Months ) - 18
  • Charges - £1,083
  • Arrangement Fee ( upfront ) - £0
  • Arrangement Fee ( spread ) - £200
  • Option Fee - £50
  • Total Charges - £1,333
  • Loan + Total Charge - £4,928
  • Deposit - £400
  • Loan + T.C. + Deposit - £5,328
  • A.P.R. - 51.5%

First Repayment - £271
16 Other Repayments - £271
Final Repayment - £321

PAY AS YOU DRIVE FINANCE AT COMPACT CARS

We're authorised and regulated by the FCA so you can trust us to handle your Pay As You Drive finance agreement. We've built up excellent relationships with a range of specialist finance companies so we can offer this alternative finance option to those who may have been refused finance before or have generally poor credit.

To help you finance a car, we're even willing to lend you our own money. Our Pay As You Drive finance agreements tend to run for 18 months. During this period, the car remains the property of your chosen finance company and ownership only transfers to you when all payments have been made.

 

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WHAT HAPPENS IF I DON'T MAKE A PAYMENT ON TIME?

The payment reminder device also acts as an immobiliser. If you don't make a payment, you won't receive the activation code. Most of our lenders offer a 30 day grace period where you're still allowed to drive the car while you arrange payment.

If, after the grace period has ended, you still haven't made a successful payment, the car will be safely immobilised. The engine will not start again until the next payment is made - hence the title, Pay As You Drive.

 

WHAT HAPPENS AT THE END OF A PAY AS YOU DRIVE FINANCE AGREEMENT?

As with any standard Hire Purchase agreement, once you've made all monthly payments and paid the option to purchase fee (normally £50), you become the official owner of the car.

The finance company will arrange for the payment reminder device to be removed by a qualified technician and you will no longer need to pay a monthly fee or enter an activation code to drive the car.

 

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