Pay­ing less for more has never been eas­ier thanks to Per­sonal Con­tract Pur­chase, which of­fers you a more af­ford­able route to a new bike ‘Be­ing en­cour­aged to buy a new bike ev­ery three years? We like the sound of that’

Motorcycle News (UK) - - Pcp Deals - By Richard New­land DEPUTY EDITOR

oney. When we’re not try­ing to earn it, we’re try­ing to spend it. And once we’ve spent it we al­ways find some­thing else to tug at our heart strings. And so the cy­cle con­tin­ues. While bikes have never been bet­ter value than they are right now, we’ve also never had more things vy­ing for our fi­nan­cial af­fec­tion.

The Holy Grail for our hard-pressed wal­lets ap­pears to be PCP, which is about as close to a win:win sit­u­a­tion as you’ll ever get where mo­tor­cy­cles

Mand bank bal­ances are in­volved – but it might not be right for you, so make sure you fully un­der­stand what it is, and how it works. The fig­ures look crazy for some makes and mod­els. Surely you can’t re­ally get Honda’s brand­new-for-2016 CB500F for just £59 a month, or a Tri­umph Street Twin for £85 ev­ery four weeks? Or how about a fully-loaded BMW R1200RS Sport SE for £169? Sounds bonkers, doesn’t it?

Well, it’s not as crazy as it might seem. You can have th­ese new bikes for less than you might ever have imag­ined – and what’s more you can have an­other new one in three years’ time, prob­a­bly with­out in­creas­ing your monthly out­lay, or hav­ing to find a fresh de­posit – but the bike may never ac­tu­ally be yours.

Per­sonal Con­tract Pur­chase has gone from be­ing a rare odd­ity in our world to tak­ing 20-30% of the new bike fi­nance mar­ket, and it’s grow­ing fast. If we fol­low the trend of the car mar­ket, over 90% of fi­nanced new bike pur­chases could be by PCP in five years.

The sys­tem works by mak­ing you pay for the bike’s de­pre­ci­a­tion (plus the in­ter­est), rather than the full retail price. Add in a de­cent de­posit, and you’re only pay­ing back a small chunk of the loan value, which is how you end up with such a tempt­ingly low monthly

out­lay. Sud­denly, the bud­get you had for a great five-year-old slice of pre­owned love­li­ness has be­come enough to land you a brand new model in­stead.

So what’s the catch? Well, at the end of the con­tract pe­riod, a nor­mal hire pur­chase or per­sonal loan op­tion would see you sit­ting pretty as the owner of your bike. But at the end of the PCP deal you don’t own any­thing, and in­stead have a de­ci­sion to make: do you pay off the out­stand­ing amount and keep the bike; give the bike back and walk away ow­ing – and own­ing – noth­ing; or do you roll your PCP deal over – hope­fully with enough equity to act as your de­posit for the next dream ma­chine?

You can guess what most peo­ple do, par­tic­u­larly as the de­pre­ci­a­tion cal­cu­la­tions usu­ally mean the bike is worth more than pre­dicted (the Guar­an­teed Fu­ture Value – GFV), so you have a de­cent de­posit built in to use for your next bike. If you like to change your bike ev­ery two or three years, and aren’t pre­cious about who legally owns it, then it’s ideal. And even if you weren’t in the habit of think­ing about own­er­ship this way, PCP en­cour­ages you to do so, which is why man­u­fac­tur­ers and deal­ers love it so much – it keeps cus­tomers com­ing back.

You’re ef­fec­tively en­ter­ing into a long-term hire agree­ment, so if you run the bike into the ground you’ll end up hav­ing to pay more than the agreed value at the end. But if you check the in­ter­est rate is com­pet­i­tive and re­search the fu­ture val­ues of sim­i­lar bikes from other man­u­fac­tur­ers, keep your bike ser­viced and in tip top con­di­tion, you can’t go far wrong. PCP also lets you keep your op­tions open – so if your cir­cum­stances change you’ve still got op­tions be­yond fi­nan­cial penal­ties, or a stint in jail.

And the best bit is that when your con­tract ends, you are ac­tively en­cour­aged to go and look at a new bike to re­place it. Be­ing en­cour­aged to buy a new bike? We like the sound of that.

£95 per month? Yes please

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