Are PCPS worth it?
The rise of the PCP deal makes new bikes more accessible – but what’s out there?
IF YOU HAVE upwards of six grand to spend on a new bike, you have some tough choices to make. Sure, you can buy second-hand and get a top-end model that’s a few years old but new to you. Or you could get a bike that is totally, completely, brand-spanking new. And let’s be honest, there’s something quite special about being the first name on a log book.
But hang on – why would you buy a brand-new, basic middleweight roadster for £6k when for the same money you could get a decent used big-capacity adventure bike or sports tourer? Fair enough… but what if you might be able to get a brand-new big-capacity adventure bike or sports tourer for that money. It’s possible because of the Personal Contract Purchase (PCP) schemes offered by bike manufacturers. In fact, these modern finance schemes mean you might even be able to ride off on a brand-new bike if you have far less than six grand in your pocket.
It’s worth stressing that a PCP deal isn’t right for everyone – but it is worth considering. Rather than tying up a large chunk of money by buying a bike that will then depreciate, you put down a deposit and ride off on a brand-new machine, while paying a monthly fee based on its depreciation towards an agreed Guaranteed Future Value (GFV).
At the end of the PCP term you can make a final balloon payment to buy it outright (the GFV) – or you can give it back. If you do this, and the bike is worth more than its
“You can make a final payment to buy the bike outright”
“You simply put down a deposit and ride off on a brand-new bike”
GFV, you’ll get the difference to put towards the deposit on another machine. Or you could just drop the keys on the desk and leave (but then you are bike-less).
There are caveats. There’s an annual mileage limit to observe. If the bike’s written off or stolen, you’re still liable for all the finance, including the final GFV payment. And if you reach the end of the PCP term and the bike is worth no more than the GFV, you won’t get anything for a deposit on another bike. If you’ve trashed it, you may have to make up the difference.
There are ways around these issues. Make sure the mileage limit reflects your useage. Check your insurance will cover any crash or theft loss in full (it should). And set up a separate account, putting a little aside each month, on top of the PCP payment. If you don’t need it for the next deposit, you can treat your partner to a weekend away (or buy that new lid…).
So what are the smart deals? As ever, it depends what kind of bike you want. Here are the PCP deals we’d investigate.