WHAT IS PCP?

Motorcycle News (UK) - - Contents -

Per­sonal Con­tract Plans are a type of fi­nance deal that al­lows you to get a new (or used) bike in your garage for less. 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 low monthly out­lay.

So what’s the catch?

At the end of the pe­riod, 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 deal over? Most will use the eq­uity in the guar­an­teed fu­ture value (GFV) as a de­posit, and roll onto a new PCP deal. But be aware that you might not have enough eq­uity to do this, mean­ing you’ll need to find a new de­posit.

Be aware that...

A sig­nif­i­cant pro­por­tion of the credit is de­ferred un­til the end of the con­tract, and it’s not the cheap­est route to own­er­ship. You need fully comp in­sur­ance, and ex­cess mileage charges ap­ply, while ne­glect will dam­age the GFV. It’s not per­fect for every­one.

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