PCP is one of the most convenient and cost efficient ways to purchase a new or nearly new car today; it allows customers to purchase a vehicle of their choice at a very attractive fixed monthly finance payment, with the benefit of a low initial deposit and a guaranteed future value (GFV) at the end of the agreement. PCP is particularly useful if you are:
- A company car driver opting out of the company car scheme – (because you can use your company car allowance or mileage reclaims to fund your monthly PCP payments and avoid paying excessive company car taxes)
- A buyer with a low initial deposit to put into purchasing a vehicle
- A buyer looking to drive a higher specification vehicle with a lower than usual monthly payment
Motor Depot has always offered some of the best rates around for Personal Contract Purchase (PCP) we have several lenders offering superb rates and terms together with insurance products at very competitive prices, whether you require finance for a new or nearly new vehicle we have a product to suit.
However we now believe we have the most competitive PCP product available anywhere in the UK market place. And to you the customer this means you can now acquire the cheapest new and used cars using the cheapest finance product!!
A mentioned above Personal Contract Purchase provides the benefits of driving a higher specification vehicle for a lower monthly payment. Unlike the traditional means of purchasing a vehicle through finance, this is achieved by deferring a percentage of the total cost of the vehicle until the end of the contract. This is known as the guaranteed future value (GFV), then at the end of the agreement the customer has three options:-
Option 1
If you think the vehicle is worth less than the GFV you can simply return it to the finance company. Providing the vehicle is in good condition and has not exceeded the agreed mileage, you will have nothing more to pay. The finance company has guaranteed this future value and therefore they will absorb the loss.
Option 2
If you want to keep the vehicle, you simply pay off the outstanding GFV to the finance company.
Option 3
Thirdly, you can part exchange the vehicle with a motor dealer for your next new vehicle. If the part exchange value is greater than the GFV, this sum can be used towards a deposit on the new agreement. Alternatively, you can sell the vehicle privately and keep any profit over and above the GFV.
Excess Mileage
At the beginning of the agreement, you are required to decide on the total mileage for the contract period. If you decide to hand your vehicle back to the finance company and your mileage exceeds the agreed mileage, you simply pay a fixed amount for every extra mile.
Wear & Tear
It is in your interest to minimize the vehicle's 'wear and tear' and not exceed the agreed mileage. When the agreement has finished, the vehicle may well be worth more than the GFV, providing you with extra value. In simple terms 'normal wear and tear' means that for its age and mileage, the vehicle is in fair working order, condition and repair. A detailed guide will be provided to you by the finance company at the start of your agreement.