What is Future Value Financing and how does it work?

Future Value Financing is a great alternative to traditional purchase financing or leasing. With the Future Value Financing option, you get to take advantage of a lower monthly payment and have the advantage of owning your vehicle with no kilometres restrictions just like traditional purchase finance.

You purchase the vehicle and finance it using a Future Value Financing contract through a financial institution. The term of your finance contract is 60 months (5 years) but it is amortized over 84 months (7 years). This allows you to have a lower monthly payment. Your payment schedule is structured using a consecutive monthly payment for the 60 months (5 years) and a balloon payment at the end of your contract (which is the amount remaining on the loan). At the end of the contract term, you have 3 options for paying the balloon payment:

  1. 1. Refinance the outstanding balancing owing;
  2. 2. Purchase the vehicle by paying the outstanding balance; or
  3. 3. Trade the vehicle in towards the lease or purchase of a new Hyundai vehicle.

How does Financing work?

When you purchase a vehicle you can pay for the entire amount up front or you can use a loan to purchase the vehicle.

When you purchase a vehicle with a loan, a financial institution pays the selling dealer on your behalf; in return you agree to pay back the money borrowed over a specified period of time (typically up to five years). The financial institution will then charge you “interest” on the money borrowed.

How does Leasing work?

A lease is the payment for the use of a vehicle over a specified period of time. Your payments cover the vehicles depreciation over the term of the lease. Because this amount is much less than the full purchase price, the payments can be less. You (referred to as the “Lessee”) agree to maintain the car during the lease and only put the number of kilometres specified in the lease agreement. At the end of the lease, you can return the vehicle or take advantage of the option to purchase it.