PCP: Don’t get caught out

Motorcycle News (UK) - - Naked -

Are there any pit­falls to Per­sonal Con­tract Plans?

Yes, of course there are. But they’re very clearly de­fined. The key to do­ing the per­fect deal is be­ing com­pletely clear about what the plan en­tails, and be­ing ut­terly con­fi­dent that it meets your needs. There are two key points worth not­ing:

Neg­a­tive/neg­li­gi­ble eq­uity

Most rid­ers who buy their bikes on PCP will roll their deal over to a new bike when the term comes to an end, hope­fully us­ing the eq­uity in their deal as a de­posit for the next bike. This is lovely in the­ory, but there is a grow­ing trend amongst our four-wheeled friends for the Guar­an­teed Fi­nal Value (GFV) to be nighon iden­ti­cal to the value of the car. Bang goes your eq­uity for a de­posit – and that means stump­ing up another lump sum to start again with a fresh PCP deal. If the GFV looks shock­ingly high, and/or the monthly pay­ments shock­ingly low, make sure you in­ves­ti­gate the deal thor­oughly.

Miles of smiles

Don’t un­der-de­clare your av­er­age yearly mileage in or­der to boost your GFV or re­duce your monthly pay­ments. Some mileage penal­ties are steep, and you could find your­self fac­ing big ex­cess mileage costs.

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