Personal Contract Purchase
A Personal Contract Purchase (PCP) plan will enable you to purchase your next car with lower monthly repayments. The way this is achieved is by deferring an amount of the total cost of the vehicle to the end of the contract. This amount is known as the Guaranteed Future Value or GFV.
The Guaranteed Future Value plus your deposit is subtracted from the cash price of the vehicle and your monthly payments are based on the balance (plus interest on the balance and the GFV).
By only repaying the difference between the cash price and the optional balloon payment you are only financing the depreciation of the car.
At the end of the contract you have the following 3 options:
Option 1 – You can return the vehicle to the finance company and if you have not exceeded the agreed mileage, you will have nothing more to
Option 2 – You may keep the vehicle and simply pay off or refinance the outstanding Guaranteed Minimum Future Value [GMFV] payment.
Option 3 – You can part-exchange your vehicle and if the trade-in value is greater than the GMFV, the difference is yours to keep.
Lease Purchase Payment Plan
Lease Purchase Payment Plan will enable you to purchase your next car with lower monthly repayments. The way this is achieved is by deferring an amount of the total cost of the vehicle to the end of the agreement. This amount is known as the Residual Value (RV).
It is the customers responsibility to settle the final payment either though additional finance, cash or settlement by part-exchange.
The Lease Purchase Payment Plan product and has no tie to a mileage contract. Repayment periods are typically taken over 2, 3 or 4 years and settlement can be made at any stage of the agreement, which add flexibility.
We would recommend that you select a realistic Residual Value for the vehicle you intend to purchase to give some equity. At the end of the agreement you have three options:
- If you want to keep the vehicle, you can simply pay off or refinance the outstanding balloon
- You part exchange your vehicle with a motor dealer and if the trade-in value is greater than the RV, the difference can be used towards a deposit on the next agreement or vehicle purchase.
- You can sell the vehicle privately and keep any profit over and above the RV.
Call us now on 01925 589020 for your quote with our latest rate and offers and see how much we can save you!