The Benefits
- Low deposit
- Tax efficient allowances
- Option to own
- Maintenance option
- No resale shortfall
- No end of term ownership
Personal Contract Purchase
This relatively new product is very similar to a Lease Purchase. However, the Final Lump Sum Payment (balloon or residual) is guaranteed. What this means to you is that at the end of the 1, 2 or 3 year agreement the finance company will take the vehicle back off you at the amount of the balloon set at the beginning of the agreement.
This offers you a protection against any losses on the value of the vehicle over the term.
Using a P.C.P agreement gives you 3 choices at the end of the period.
- Pay the outstanding balance and keep the vehicle.
- Part exchange the vehicle and use the remainder of the money after paying the balance to put down as a deposit on your new car.
- Hand the vehicle back and walk away.
With this type of finance you can add a maintenance agreement which for an added cost will cover you for servicing and fair wear and tear on tyres and exhausts.