A Personal Contract Purchase arrangement, or ‘PCP,’ is a type of financing that allows you to lower your monthly payments by deferring part of the repayment until the conclusion of the contract. The GMFV, or Guaranteed Minimum Future Value, is the ultimate payment that is guaranteed by the financial lender. This statistic is based on industry data and determines the expected worth of your car at the end of the finance arrangement, based on the term and estimated yearly mileage. Should used automobile values fall in the future, the GMFV will provide you with further protection.
Hire Purchase is a type of financing that gives you a fixed interest rate and monthly payments, allowing you to budget accurately. You hire your car after paying a very small deposit and will pay for the whole worth of the car in monthly instalments. It’s one of the simplest types of financing because there are no mileage restrictions, making it easier if you’re not sure how much you’ll use the vehicle.
Monthly payments are lower with Lease Purchase or Balloon HP than with Hire Purchase. LP is a finance plan that gives you a fixed interest rate and fixed monthly payments, with the exception of a final option to purchase fee.
