PERSONAL CONTRACT PURCHASE (PCP) With Personal Contract Purchase (Land Rover Freedom PCP), you can take advantage of the high residual values of Land Rover vehicles to help keep your monthly payments lower by deferring a significant proportion of the amount of credit owed until the final payment. You also have a number of options at the end of the agreement.
WHY IS THIS PLAN FOR ME?
- I would like to keep my monthly payments as low as possible.
- I would like to choose how much I pay upfront (subject to a minimum).
- I want flexibility at the end of my plan.
- I want to help protect against an unexpected fall in used vehicle prices.
- I like to drive the newest models.
HOW IT WORKS
1. Choose any new or used Land Rover up to three years old.
2. You agree an initial deposit with your Land Rover retailer. A part-exchange may be used to support this deposit - please ask your retailer for more information.
3. You then choose your agreement term (between 1-4 years) and your annual mileage.
4. The retailer will then submit the application to Land Rover Financial Services.
5. Land Rover Financial Services will calculate your vehicle's Predicted Value (PV) - this is their predicted value of your vehicle at the end of your agreement based on your agreed annual mileage and contract term.
6. The deposit and PV are deducted from the price of your Land Rover. You then pay the remaining balance and interest, which is split into fixed monthly repayments for the length of your agreement.
WHAT IS "PREDICTED VALUE" (PV)?
PV is the expected value of the vehicle you are purchasing at the end of the credit agreement, set by Land Rover Financial Services.
It is based on car model, loan term and expected annual mileage.
Payment of the PV value is deferred to the end of your agreement.
A higher PV will mean smaller monthly repayments but a bigger payment at the end of the agreement if you wish to own the car outright.
A lower PV will mean bigger monthly repayments but a smaller payment at the end of the agreement if you wish to own the car outright.
If you choose to return the vehicle at the end of the agreement, you will have nothing further to pay if the car meets the mileage and condition requirements.
Once set, PV cannot be changed, and therefore it protects against unexpected falls in used vehicle values.
WHAT IS RESIDUAL VALUE AND HOW DOES IT MAKE OUR CARS MORE AFFORDABLE TO YOU?
- 'Residual value' is how much a fixed asset is worth at the end of the finance agreement, or at the end of its useful life. In the context of our financial agreements, if you finance a car for three years, its residual value is how much it is worth after three years.
- Land Rover models have class-leading residual values.
- This means that they typically hold onto their value better than other makes of car over a certain period of time – the length of a financial agreement, for instance.
- Depreciation is the value that a vehicle loses over a period of time. Depreciation = New Car Value – Residual Value. So, higher residual value means lower depreciation.
- With the popular Land Rover Freedom (PCP) plan, your monthly payments are calculated based on the Predicted Value of the vehicle, which takes into account the depreciation, over the 1-4 year period of your agreement.
- The less value the car loses, the more affordable your fixed monthly payments could be.
… all of which means that the class-leading residual values of Land Rover models helps make them more affordable on a month-by-month basis.
HOW ARE MY PAYMENTS CALCULATED?
Amount to Pay Monthly = [(Total Price of Vehicle – Deposit) + Total Interest] – PV ÷ Agreement Length in Months
Final Payment = PV + a nominal Option To Purchase Fee
WHAT HAPPENS AT THE END OF MY AGREEMENT?
You have three options:
1. Part-exchange – subject to settlement of your existing credit agreement, you can choose a new or used Land Rover from your Retailer and start a new credit agreement. New credit agreements are subject to status.
2. Return – hand back your vehicle to Land Rover Financial Services without making your final payment. If the vehicle is in good condition and has not exceeded the allowed mileage, you will have nothing further to pay.
3. Retain – pay the PV as your final lump sum, plus the Option To Purchase Fee, and the title of the vehicle will be transferred into your name.
WHAT ELSE DO I NEED TO KNOW?
- Land Rover Freedom (PCP) is available for new or used vehicles (up to 3 years old).
- The maximum mileage at the start of the agreement is 3,000 miles per month of the vehicles age or 60,000 miles (whichever is the lower). For example, a 1 year old vehicle could not have a recorded mileage exceeding 36,000 miles and a 2 year old vehicle must not have a recorded mileage above 60,000 miles.
- Vehicles must be no more than 84 months old at the end of the agreement.
- The maximum end of contract mileage must not exceed 143,000 miles. Maximum annual contracted mileage is 35,000 miles per annum.
- Minimum contract term of 13 months, maximum contract term of 49 months.
- A significant proportion of the total amount payable is deferred to the end of the agreement and you should prepare for this if you want to own the vehicle.
- You will not own the vehicle until you have made all the payments including interest, after which you will own the vehicle outright.
- You must have fully comprehensive insurance.
- This plan is also available to business customers.
- Credit is subject to status and is only available to UK residents aged 18 and over.
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Credit products are provided by Black Horse Limited trading as Land Rover Financial Services, St William House, Tresillian Terrace, Cardiff CF10 5BH.
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