Car Credit – Personal Contract Purchase
The personal contract purchase, PCP in short, is one of the most popular choices within the car credit option and motor financing due to its flexibility, low initial commitment of deposit, low amounts of monthly repayments and a guaranteed value of the vehicle at the very end of the agreement. Additionally, this type of car credit is just ideal if a driver plans to change their car at the end of the contract period. By use of PCP the customer will be able to purchase a new vehicle with lower amount of monthly repayments by deferring a large amount of the total cost of the car to the end of the contract - the amount, or actually a sort of lump sum, is known as the Guaranteed Future Value, GFV in short, and often referred to as the optional final balloon payment. The GFV is set by the finance company or financial organisation granting this sort of car credit and is based on the chosen vehicle as well as the annual mileage stipulated by the customer in the contract. The stated annual mileage can be set between 6 and 30 thousand kilometers per annum and will directly affect the figure given for the GFV. At the end of the car credit PCP agreement the customer will have a choice of either making a final lump sum payment in order to complete the agreement and become the car owner, or to simply return the car to the finance company without any further obligation.