PCP Finance All You Need To Know

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With the standard of living rising across the world, the demand for variant goods and services is on the rise. As individuals strive for convenience in all aspects of their daily lives, they desire products that provide ease and comfort.

The realm of transport is no different as people wish to move away from the utilization of public conveyance to the ownership of private vehicles. Fiscal schemes such as the Personal Contract Purchase has made this possible for millions of residents across the United Kingdom. It has equipped countless customers with the ability to procure new cars and cruise around the country in them by decreasing monthly payments from before.

Purchase Contract Purchase deals has laid out options that cost less than a hundred pounds a month. The incredible part is that this applies to first-hand, brand new vehicles that will only require regular servicing every few months.

What is PCP Finance?

This economic wonder was introduced to the United Kingdom market by Ford, the vehicle giant with its “Options” plan in the year 1992. It was a local hit and caught the attention of other automobile players in the industry who were quick to latch onto the profitable wave it had created. The primary characteristics of PCP related cars contain a “front-end” deposit from the consumer along with a final “balloon” payment.

In order to start your PCP arrangements and Car Title Loans it’s important that you know your rights, you have to work out the terms and conditions with your car seller. Clearly disclose the amount you wish to take on as a loan, the sum you can put down as an initial deposit, and if possible, the value of your current vehicle you are exchanging.

The car dealer will submit your PCP application to automobile commercial ventures. If you prove to have a creditworthy score and pass all the given criteria, then the lender will pay for the car in question on your behalf. The duration of your arrangement will require you to fulfil the borrowed sum along with interest and will not pertain to the future value of the car. This trait allows PCP monthly features to be lesser in amount as compared to other vehicle financing options.

How does PCP work?

The procedure to undertake a PCP loan has been briefly outlined above. All you have to do is select your car dealership, visit him, know the car you want, decide on a monthly payment with interest rate, do the paperwork and drive away with the car of your dreams.

It is true that this process is similar to a Hire Purchase contract. However, there is a higher degree of technicality attached to the world of Personal Contract Purchase. The catch under a PCP agreement is that you are taking into account the fact that cars lose value over time.

There is a clause under the Personal Contact Purchase agreement that recognizes depreciation as an accounting occurrence. For instance, if you are taking on a PCP contract that spans a period of five years, the dealer in question will have an estimation of the car’s worth five years into the future. The financial institution arranging the PCP agreement will assign this number that is known as the Guaranteed Minimum Value. Your monthly payment will comprise the fundamental difference between the GM figure and the vehicle’s new price.

Which PCP plan should you get?

If you have made the awesome decision to buy a car and are considering PCP leasing options, then the first thing you have to do is to decide its duration, the mileage and the percentage of deposit you can lay down.

Do your research but the GMFV will be similar at different dealers as it will be affected by the number of permitted miles and span of agreement you choose. For instance, if you opt for an older automobile model, it will already come with considerable mileage and will be less worth at the end of your PCP arrangement.

And remember, if you go over your mileage parameters-you will be charged for it. If you are confident that you will want a change of vehicle after three years, then don’t choose a PCP length agreement for five years. The reason for this is because the GMFV will be forecasted based on the depreciation model your chosen will be expected to follow. In the initial years, depreciation will be high and will become relatively stable after the third year.

Does PCP work for me?

If you intend to upgrade or procure a new vehicle after two years, then PCP is an effective financial tool to pursue.

However, if you plan to keep your car around for longer than that and drive it around for five years or so, then using a personal car loan or a hire purchase option may be better for you. Keep in mind non-PCP alternatives will come with higher monthly payments, yet you will own the vehicle at the end without a large “balloon” final instalment. Generally, about twenty percent of Personal Contract Purchase consumers decide to purchase the vehicle in question at the end of the agreement.

The great part of walking down the PCP road is that you get your hands on a brand new car for a low monthly payment. Perhaps you would not be possible to afford that new car if it were not for PCP. Due to the fact that PCP products are only based on new vehicles, there will be a lower maintenance cost involved as it will be of higher quality.

The industry norm is also for car sellers to sweeten the deal by offering maintenance and service warranties as a one package deal. With a wide range of choices available at the end of the PCP arrangement, you have the flexibility to decide what you want to do with the car. You can even buy it if you like. It is imperative that you comprehend that the transfer of ownership, if you will it, will take place only at the end of the PCP contract once you make a final payment.

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8 Ways Life Insurance Helps You Retire

1 - 8 Ways Life Insurance Helps You Retire

Do you view life insurance as an essential component of your future economic strategy? The primary reason you may choose to invest in it is to save your dependents or loved ones from any financial burdens that may arise from the loss of your income if you pass away.

According to The Callahan Law Firm this policy becomes a form of protection for your family as they will not have to worry about major fiscal expenses such as remaining mortgage payments, any outstanding loans and other high costs that could incur. If you are one of the lucky few who has put away enough money on the side to fund your children for college, fulfil your mortgage loan payments and for a rainy day, then you can definitely think of investing in a life insurance policy as part of your retirement plan. How can it help you?

Long Working Cycle

With constant innovations in medicine and technology, the global mortality rate for mankind has increased in the last century. As awareness spreads, a large number of individuals have adopted healthier lifestyles and nutrition. People are able to work longer than the age of sixty-five-which is considered the general retirement phase.

In today’s society, it has become a norm to find people at such stages in their lives to be actively working and earning more money. This means that in the unfortunate and unforeseen event of their expiration, an alternative form of their income will have to be provided. This is where your life insurance policy will act as your saviour. It can substitute your pension in your absence for your spouse as well.

Become Debt Free

Would it not be fantastic to be free of all pending loans when you decide to retire? Not everyone is blessed enough to be part of such a utopian world. It is in this scenario where the procurement of life insurance can pay off any existing debt and help your inheritors shoulder the responsibility. How will this happen? When the person whose name the life insurance policy has been taken out on passes away, the insurance service provider will release a lump sum to the beneficiary. This is known as the death benefit.

Meet Miscellaneous Costs

Every household has a different story to tell and holds variant financial parameters. It is possible that in the event of a primary bread earner’s death, the ones left behind may not even possess an adequate amount of money to fund a funeral, pay inheritance tax or other estate related costs. The finances received from the life insurance plan can settle such expenses and reduce your family’s worry in this regard at least. It will benefit them greatly as they will already be dealing with the emotional rollercoaster of your loss.

Secondary Pension

As you have retired, you will surely have the right to receive a pension format. However, if you pass away and leave behind an ailing or dependent partner, then she or he will no longer have access to the income from your pension. You guessed it, the life insurance pay-out will replace those funds and ease your partner’s day to day fiscal outflows.

Support Society

Life insurance has all sorts of possibilities. Even if you do not leave behind a family, there are other actors who can benefit greatly from life insurance. If you believe in giving back to the society that helped you build your dream life, you can name your favourite charity or trust as the beneficiary of your life insurance plan.

Upon your passing, the insurance service provider will release a pool of funds to them and you never know whose life could change for the better as the result of your generosity. When you reach your retirement age, it is a natural tendency to reflect and look back on what circumstances and individuals helped you become who you are now. This would be an effective and magnanimous way to thank them.

Emergency Cash

Life is extremely unpredictable and can throw anything your way. You never know when you may need a hoard of cash for any kind of purpose: to provide medical treatment for the sudden emergence of an illness, to help a friend, to travel the world, or even to pursue your life long dream of becoming a sculptor. If you opt for a permanent life insurance plan, it comes with a feature to use part of it or the whole amount (if you outlive its term) to fulfil your heart’s desires.

Tax Free Money

Another important characteristic of choosing a permanent life insurance plan is that the cash flow associated with it increases over time. As stated earlier, it is your discretion what to do with that money. You can use it to continue premium payments on the existing policy or procure another one. However, what we are referring to is the fact that you will be able to take out a certain amount that will be free from the clutches of taxation.

Fair Treatment

It is likely that you have worked hard to own property and procured other assets along the way. How do you divide them equally amidst your inheritors? It is a challenging feat, is it not? Perhaps there is a family business that your father handed down to you and you need to decide who is best fit to take your position.

It could be your partner or your youngest child. Maybe there is a condo in the French Alps you can give to your firstborn offspring. What about the one in the middle? Life insurance is an effective tool to help you equalize your children’s inheritance. How? Simple.

Either, you use the funds to expand your business so it is large enough to suffice more than one share to your remaining child. Or, you could simply bestow the life insurance payment to him or her. In this way, internal family conflict and drama will be effectually avoided and you can move onto the next life at peace.

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Life Insurance for Seniors over 70

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Insurance is a complicated ballgame with extremely high stakes. It becomes a vital component of your long term financial plan as you grow older, get married and launch your entrepreneurial ventures. You will be mentally at peace knowing that you have built a life of comfort for your family and are leaving them financially sound.

Life insurance will substitute the income you provided for your family as the primary bread earner. In the unfortunate event that you behind young children and a partner dependent on your economic contribution, the compensation from your life insurance policy will serve as a means to pay for someone to complete daily household tasks such as cleaning and cooking.

This will, especially, be effective if your partner had been a stay at home partner and goes out into the world to work after a break. If not that, your life insurance policy will become your family’s inheritance and help your children or spouse establish a lucrative future. Do not forget that we live life with the burden of loans: be it a car loan, credit card debt or a mortgage on your house. Relieving them of this fiscal burden will be a great service.

It must be noted that the requirements for life insurance policies change with age. For instance, affordable life insurance for elderly over 70 can be used to fund funeral costs, pay off estate costs or any other pending tax obligations. Of course, the life insurance policy’s application is at the discretion of the beneficiary.

To understand the classes of life insurance available for individuals above the age of seventy, read on. After all, to understand its technical dynamics, you will need all your powers of comprehension.

Whole Life Insurance

If it is a lengthier time coverage that you desire, then your path may lead you to procure whole insurance policy. This brand of insurance will issue final expenses (inclusive of burial and funeral costs) longer than the usual ten or twenty years offered in the short term. Yes, it does come with a higher premium but gives you a greater degree of flexibility.

Sometimes, there may still be time parameters incorporated by whole life insurance. This usually extends up to the age of one hundred or one hundred and twenty. The good news is that if you consistently pay the premiums due, your policy will remain enforced till passing.

Given the nature of this policy, you will gain financial value as a lump cash sum will gather over the passage of time. In the event of any unanticipated or unforeseen emergency, you will be able to borrow funds from your insurer against this asset (accumulated cash value).

The status of your health will have a huge bearing on your ability to obtain a whole life insurance policy. When at the age of seventy, owning a life insurance policy can become a challenging task. Insurers have the right to reject your policy application if you appear as too high level a risk in the form of a retiree who suffers from a serious or terminal illness.

Regardless, you will receive a free medical check up courtesy of the insurance service provider, specifically if you are a senior at or nearing the age of seventy. Do not worry, it consists of a series of routine medical tests such as monitoring of your blood pressure, an analysis of your urine/blood, and will undertake your weight and height numbers. The insurance underwriter can request other medical information as part of his due diligence efforts.

If you are happy with a short term whole life insurance policy, then the entire process of medical examinations can be evaded. A ceiling will be set on the death benefit (ranges up to twenty-five thousand dollars). It is because of this very reason that this policy does not appeal to potential buyers as it also comes with a more expensive fee.

Term Life Insurance

Insurance seekers over the age of seventy discover short term policies to be the most viable and pragmatic solution. The scope of time coverage is approximately ten to twenty years and appears to be sufficient for insurance requirements. If you wish to be cost-effective, term life insurance may be the best option for you as its premiums are cheaper than other insurance products. Of course, if you are fortunate enough to outlive the policy time, then there will be a financial setback.

This kind of insurance policy can allow you to customize its features with certain add-ons. For example, you can opt for a serious illness component, which could prove useful if you contract such a disease. A care protection element can be augmented to such an insurance product as well if the patient is unable to take care of himself. This will facilitate any medical care costs that may be incurred as a result.

Estimation of Premiums to be Paid

There is no such thing as a free lunch and almost everything comes with a cost. In the world of life insurance, the benefit is that there is some flexibility for payment. You can make a one time, large sum payment for the policy and be free from any future outflows of cash or you submit regular premiums.

For seniors above the age of seventy, premiums will tend to be higher as coverage is required for any possibility of medical issues. It is interesting to note that premiums for men can be higher than for women.

Buying a life insurance policy is a personal and emotional journey. Confer with your peers and family who form your circle of trust. It is a safe fall back option to protect your loved ones and it is never too late to invest in one, even if you are nearing your time of retirement.

Of course, it is always better to start your research early as you will also get better terms and conditions. The healthier you are, the stronger your life insurance policy will be.

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What do you need to know about debt?

featured3 - What do you need to know about debt?

Debt seems to be an almost inescapable part of modern life. It has become very common to use credit cards, have mortgages, and take out loans to survive during financial hardship. So, what is debt? And what do you need to know about it?

 

1. What is debt?

1 - What do you need to know about debt?

Most people know what debt is. It is an amount of money that is owed to another person or company. But what many people don’t know is that there are many different types of debt.

Secured debt: Debt which is connected to one of your assets, such as to your house or your car. Mortgages and car loans are the best example of this, but it is possible to take out loans against other valuables, such as white goods, televisions, or even jewellery.

Unsecured debt: Other debts which are not taken out against your possessions. This may be credit card debts, bank loans, or pay day loans. However, this does not include loans that require a guarantor.

Joint debt: Joint debt is debt which is taken out by two, or more, people. All the people who have taken out these debts are liable for the full amount, and if one person cannot pay, the others must pay the full amount. Credit cards cannot have joint debt as only one person ever legally owns the card, any other people given access to the account are not legally responsible for their debt.

Arrears: Arrears occur when a payment is missed. For example, you could have tax arrears, rent arrears, or utility bill arrears. Tax arrears are one of the worst debts to have because the government is more likely to turn to legal measures to reclaim the debts, such as Bailiffs, and are less likely to be open to negotiation.

Student Debt: Student debt is very different to other kinds of debt, because it operates more like a tax than a debt. A percentage of your income is taken to pay off your debt, and it often happens before it reaches your bank account. However, if you work abroad, or are self-employed, you may have to calculate and pay this debt back yourself.

2. Debt is not scary

2 - What do you need to know about debt?

As we mentioned earlier, debt has become a very normal part of life, and this is because not all debt is bad debt. Student debt, for example, allows you to have an education, and can be very manageable.

Just because you have some debt, doesn’t mean you are in trouble. Debt is often used as a great tool to build up a great credit score. If you are able to pay off your debts comfortably, then you have nothing to worry about. It is important to remember your ‘priority debts’. These are debts, such as council tax arrears, that can have serious implications if they are not paid. Local councils, for example, could have the amount taken directly from your wages or benefits.

There are a number of signs that you may need serious help. If you are sacrificing food, or other necessities, in order to pay your debts, or you can’t afford to put aside any money at the end of the month, then you should probably look into getting some debt advice.

Remember, if you do need help, you are not alone. In the UK, there are 8 million people who are seriously struggling with their debts.

 

3. Bankruptcy is not the only solution

3 - What do you need to know about debt?

Once you have realised that you need help sorting out your debts, it is also important to realise that this does not mean you have to go bankrupt! There are plenty of debt solutions to explore that are great alternatives to bankruptcy.

Debt Management Plans: You can contact your creditors and negotiate with them in order to lower the monthly amounts that you are paying. If you are open and honest with them, they will often agree to do this as they know it is the best chance that they have to get the money owed to them. However, this is not a legal solution, and so there is no guarantee that your creditors will accept, or follow through, with the agreement. For more information on Debt Management Plans, click here.

Debt Consolidation Loans: This is a debt solution which allows you to merge all your debts into one payment, but taking out one big loan to cover all your loans, and then paying that loan off. This can help you manage your debts, but is unlikely to significantly make the amount you pay more manageable, unless you manage to find a loan with a significantly smaller interest rate.

Individual Voluntary Arrangement: An IVA is a legal solution. Affordable monthly payments are calculated based on your actual income and expenditure. You pay these to an Insolvency Practitioner who distributes it among your creditors. As everything is done through an IP, your creditors are no longer able to contact you. Unlike Debt Management Plans, IVAs last for a limited time – 5 or 6 years. After this time, your remaining debt is written off.

Trust Deeds: A Trust Deed is the Scottish Equivalent to an IVA. Like an IVA, affordable monthly payments are distributed amongst your creditors. However, Trust Deeds can last for as little as 4 years.

Bankruptcy: Finally, there is Bankruptcy. In Bankruptcy, an Official Receiver takes control of a person’s finances and assets. This means they can organise payments to creditors out of your wages, and sell your assets, such as your home and your car, to pay off as much of your debt as possible. It can cost £680 to file for bankruptcy. The Scottish equivalent is called sequestration.

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Different Budgeting Options

featured2 - Different Budgeting Options

Bills can be overwhelming for many of us. It’s not always the amount due that can cause problems, but also the due date. It’s very rare that two bill dates fall on the exact same date, so ensuring we have money available can prove to be troublesome.

This is where many consider creating a budget but which method will best suit your circumstances. Unfortunately, there is no sole solution that applies in every instance. However, there are several options available, which means that it should be too difficult to find a solution that works for you.

Use a Calendar or Diary

While the use of a calendar or diary is not going to win any awards for innovation, the effectiveness shouldn’t be underestimated. To make the process clearer you can consider using different coloured pens, or highlight entries with a highlighter to ensure you can tell the difference between income and expenditure.

The drawback of using this method is that it can become messy should things change. However, if you have an income that is regular and consistent, there’s very little reason as to why you can’t benefit from the use of a calendar or diary.

If you do need to make a series of amendments, and you really would prefer to use a diary or calendar, then it may be a good idea to write down financial commitments in pencil so the process doesn’t become too messy and confusing when you need to make amendments.

Use a Spreadsheet

Again, the use of a spreadsheet can seem a little dated, but effectiveness rises to the surface once again. Regardless of whether you’re using Microsoft, Google or an open-source alternative, the use of a spreadsheet for budgeting means you can create a bespoke budget with very little effort.

Don’t worry if you’re new to the world of spreadsheets, as you will often find that there are many templates available online that can be tailored to suit your needs.

Consider Using an App

The rise in the use of smartphones means that apps are now an everyday part of life. Whether we’re making a bank transfer or ordering a pizza, in most instances, you will be using an app to carry out the task. It should come as no surprise that there is also a vast selection of budgeting apps available.

There are even apps that securely connect to your bank account, allowing you to come up with a precise and accurate budget. Of course, if you’re a little sceptical, then make sure you read some reviews before choosing an app. While there are always secure practices in place, it’s completely understandable as to why some people are nervous about apps having access to their personal information.

Each app will have its own dashboard and layout, so you may need to try a few to find a fit that suits you, but having the information to hand always means you’re more likely to keep to your budget, and make changes where you see fit.

Use an Online Calendar

If you’re looking for a balance between a conventional budgeting solution that can be used online, then why not consider using an online calendar. In most instances, you will be registered with a service like Microsoft and Google, and the calendar can be synced across all your devices.

There are also plenty of other providers, and in most instances, you probably have a calendar as part of your operating system. While online calendars don’t have as much functionality as that of a budgeting app or specialist software, they’re more than useful when trying to get our financial affairs in order.

Monthly or Weekly?

Once you have decided as to which method of budgeting suits you best, you will then need to decide how to set out your budget. If all your bills are monthly, and your income is paid to you monthly, this shouldn’t be difficult. However, if you must contend with monthly payments on weekly pay, it can prove to be a little more difficult.

If this is the case, then you can budget monthly, with a view to having funds in place when bills are due. For example, if you have a phone bill due at a point in the month, you would need to look at the weeks prior to this and budget for this expense accordingly.

There is no right or wrong answer when it comes to planning your budget, you just need to ensure it’s something you understand and can rely on.

Self-Employed and Contract Work

If you’re a freelancer or self-employed individual, then creating a budget can be difficult, as many will have different amounts coming in at different times. More confusion can be caused if you’re personal bank account is a mix of personal and business payments.

IN the first instance, we should look to separate our business and personal payments, as this will give a clearer overview of our income and expenditure. Having a dedicated bank account for your income will also allow you to work out the average you earn each month.

It is advisable that you opt for a budget solution that can be easily amended, giving you an updated budget in real time. Those who work for themselves will probably have more alterations to make than others, and not recording these changes as soon as possible could have a detrimental effect moving forward.

info1 - Different Budgeting Options
Infographic by: blog.propcy.com
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Smart Ways to Spend Money

featured1 - Smart Ways to Spend Money

Do you have hard time-saving money? How about being an aggressive spender? If your answer both yes then let this help you achieved financially. It is understandable that in today’s society there are a hundred reasons why you should spend and little reason why you should save. That is why so that you would be given help in your financial status; there is a way for you to continue spending but this time a little smarter. The following stated below will help you spend money but this time you will earn money through the process.

• Spend on investments
When you are about to spend your money then better do it right. The right way would be for you to spend your money on investments. Investments can be anything from spending money to be part of a business venture or buying stocks in the stock market. This way you are re-earning the money that you spend, instead of buying stuff that you don’t need anyway. By nature, humans are fond of buying what is trendy and not realizing the benefit or disadvantages it can give in the future. For example buying very expensive gadgets, as the time goes by the value of the gadgets will depreciate in time, because sooner or later different brands and units will be released in the future.

• Open a small business
The business doesn’t have to be big, and it doesn’t have to be made by you because you can always open a small business through franchising. This way you are not wasting your money buying unnecessary things instead you are investing your money on something that you can earn through the long run. Also business is very good opportunity for you to get rich and retire early, why? Because, if you get to succeed then your flow of money will stabilize and even grow more.

• Buy seeds in discounts
Another way for you to spend money the smart way is when you do your groceries. It can’t be helped that when you do your groceries, it will cost you a lot of money that is why you should buy your groceries in a discount state. You would be able to save a lot of money because of this, and you are spending your money the smart way.

• Make a time deposit
This would mean that rather than immediately spending your money on things that you won’t need you will be spending it to the bank. There are after all banks that will keep your money safe and can give you a good interest to benefit you.

• Invest in Real Estate
If you think that your income is really high and would allow you to buy properties, and then pursue this option. Properties like houses a good investment in the future, though you will need a big amount to purchase one, the return of investments is really good once you have found a good location to resell in the future. For more information visit The Loans Departement who provide a lot of useful information regarding mortgages and bad credit remortgages.

Now you know the smart way of spending your money. Reading this will help you realize that this can help you financially. It can’t be helped after all that if saving is hard for you or you are an aggressive spender then why not spend it the smart way? It’s better to be a smart spender than a spender without a direction. The following stated above would be able to help you and you wouldn’t have to worry about saving because you are spending but this time it’s smart.

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