Personal Contract Purchase may suit certain individuals and companies who want to own their vehicles, but who also want to avoid the risk of depreciating assets. Like a hire purchase plan, your business will have the rights to the vehicle and pay back set amounts over an agreed period whilst the finance company will retain ownership of the vehicle. At the end of the contract Personal Contract Purchase allows you to pay a lump sum to keep and own the car or roll on to a new car with a new contract.
The benefits:
- Contract purchase has similar benefits to contract hire regarding fixed repayments, additional provisions and flexible terms.
- Here the funder will ‘guarantee the future resale value’ of the vehicle at the end of the contract purchase agreement for a known, fixed amount.
If you like to change vehicles regularly, this is a good option and you also have the benefit of fixing your monthly costs. If you choose not to keep the car at the end of the agreement, you can use the difference between the Minimum Guaranteed Future Value (MGFW) of the vehicle and its actual value as a deposit for a new vehicle. If the vehicle depreciates under the MGFW the finance company should accept the loss.
For more information about Personal Contract Purchase please contact our experienced advisors. We have many satisfied customers from all over the UK including Manchester, Warrington, Stoke on Trent, Crewe and Birmingham.
