With PCP (Personal Contract Purchase), you decide:
• How much deposit you want to put down
• The length of the contract (the length of time you intend to keep your LCV, a typical contract would be 3 years)
• The annual mileage you think you will do
Monthly payment are then calculated based on the Guaranteed Future Value (GFV) of your LCV. The GFV is simply how much your LCV will be worth at the end of the contract based on its age and milage. PCP monthly repayments are usually noticeably much less than HP finance, because of the final GFV payment. At the end of the contract you have three options:
• Pay the GFV and your LCV is yours to keep
• Part exchange your LCV for a different LCV*
• Return your LCV and walk away**
*Subject to settlement of your existing finance agreement; new finance agreements are subject to status.
**Subject to your LCV being returned on time, in good condition (fair wear and tear accepted, within the maximum mileage and all the required repayments having been made).