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personal contract purchase

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Personal contract purchase is by far the most popular way to for private individuals to purchase and finance a new vehicle with minimum initial outlay and heavily reduced monthly payments as a large portion of the cost is off set to the end of the contract. The individual is not liable for any of this residual value. However they may have the opportunity to purchase the vehicle for themselves or a family member.

The final optional payment is known as the 'guaranteed future value' (GFV) and is stated at the outset of the contract and is determined by the term and annual mileage. A maintenance package can also be included where a car is bought through personal contract purchase.

To recap, at the end of the term the individual has three options:

  • Hand the car back to the finance company at no expense to the user, however an excess mileage charge may be incurred if the stated mileage is exceeded.
  • Purchase the vehicle at the GFV value. We can also arrange a re financing package for the cost of this if required.
  • Use the vehicle as a part exchange as there is usually some equity between the GFV value and the part exchange value which in turn acts as a deposit on the replacement vehicle.

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