All
information is provided only as a guide.
We cannot be held responsible for any changes
in legislation.
PERSONAL CONTRACT PLAN
This produce is only available for passenger
cars. Terms and conditions apply as with
Lease Purchase, however, this product has the
advantage of allowing the customer to return the
vehicle at the end of the term. Lease Purchase
and ‘PCP balloon residual values’
are usually calculated using 80% of ‘history
clean CAP trade price’ (Industry Guide)
so you would be returning the vehicle at below
the anticipated trade price.
• Lower initial deposit
• Lower monthly repayment
• Aids cash flow
• You are not liable to settle the balloon
payment unless you wish to keep the vehicle. You
have the option of returning it to the finance
company.
Disadvantages
1. Lease Purchase finance rates are less competitive
than Hire Purchase which reflects the greater
risk to the finance company.
2. Having the balloon payment attracts increased
interest costs that, in turn, will increase the
overall cost.
3. If the need arises to dispose of the vehicle
early, you may find the settlement higher than
the sale value of the vehicle.
4. The balloon is calculated using the customer’s
forecasted mileage. If this is exceeded, and you
wish to return the vehicle, you will have to pay
a mileage penalty.
In Our Opinion
The slightly increased costs are offset by a
guaranteed future value (GFV). If the car is worth
more than the GFV, you can pay it and keep the
excess, or, if not, you can simply return the
car.
Please note, Eurovans
has compiled this information simply to assist
you in choosing the most suitable funding option.
We cannot make the decision for you.
If you are unsure, you should take the advice
of your financial adviser, or, in the
case of business customers, it is essential that
you consult with your accountant. |
