Guaranteed Future Value

Guaranteed Future Value

For a Personal Contract Purchase agreement you have the option to make the payment and keep the car, sell the car to a dealer on a part exchange for a new car, or return the car to the finance company. If you return the vehicle to the finance company they will sell the car on your behalf, and settle the outstanding final payment. If you return the car to the finance company, and you have done more miles than you have agreed to, then the finance company have the right to charge you X amount of pence per mile (this amount is agreed before you take delivery of the car, and is written on the documents you sign) to cover the loss in value of the car against the future value written.

A guaranteed future value is used to lower your monthly payments as you are not paying off all the value of the car over the term of the ageement, only interest on the deffered final payment. The future value is set by the finance company and is based on your annual mileage, and length of your agreement.