Scorti-Samuel Official Blog

  Contract purchases  A Personal Contract Purchase (PCP) is a car finance agreement that allows you to pay for a vehicle with lower monthly payments compared to a traditional loan. This is because your payments cover the car's depreciation over the contract period, rather than its full value. At the end of the agreement, you have a set of flexible options.   How a PCP works Deposit : You typically start by paying an initial deposit, which can be cash or the trade-in value of your old car. A larger deposit will result in lower monthly payments. Monthly Payments : You make fixed monthly payments for a pre-agreed term, usually 2–4 years. The amount is based on the difference between the car's initial price and its Guaranteed Minimum Future Value (GMFV), plus interest. Guaranteed Minimum Future Value (GMFV) : At the beginning of the contract, the finance company estimates what the car will be worth at the end of the term. This is the GMFV and is the final "balloon payment...