PCP?

[SBN]

Looking at a next car purchase and want to find out more about pcp and deposits.

Is there a max % vs car value you can put into a pcp deal before hp becomes a better option?

For example you put more in you get lower payments and newer car etc

[rehab71]

PCP contracts normally have a maximum deposit, normally between 30 and 35%. Once you reach the end of the agreement you will have a GMFV (Guaranteed Minimum Future Value) which you can pay and keep the car, use the equity in the vehicle as a deposit on the next one or hand the car back to the finance house. This third option is rare as you are effectivly selling the car for the GMFV, which tends to be low, the finance company don't really want the car back.

At the start of the contract you will have to specify your annual mileage as this dictates the GMFV. If you do hand the car back and you've gone over the mileage you will have to pay a pence per mileage over the mileage you said you'd do.

Remember though, regardless of your deposit you will have the same GMFV so if you put a big deposit down this time don't expect to get the same low payment on the next one unless you have another large deposit.

Hope that helps.