PCP Car Finance Explained

• Monthly instalments makes it easier to meet payments for a new car or a higher specification model and the latest technologies 
• Easy entry based on a minimum deposit of just 10% 
• Predictable cash flow based on fixed interest rate and payments 
• Include additional optional products such as Service Plans 
• Drive a new car more often thanks to shorter replacement cycles 
• No wondering about the resale value of your car - Guaranteed Minimum Future Value  
• Flexibility at the end of the agreement to choose between 3 options

At the end of a PCP contract, there are three options:

Part-exchange the vehicle for another vehicle of your choice;

Keep the current vehicle – pay the final instalment plus the ‘option to purchase fee’ and the car then belongs to you. Alternatively you can speak with a Volkswagen Financial Services Ireland customer care representative about options to extend the current finance agreement and repay the remaining amount (GMFV) over an agreed period;

Return the vehicle to the dealer with no further repayments.

Volkswagen Financial Services Ireland guarantees the minimum future value at the end of the agreement so both you and the dealer are protected. Any shortfall is covered by Volkswagen Financial Services Ireland. As previously referred to, this is subject to the condition of the vehicle and the annual mileage.

At the end of your agreement if you choose to sell your car either to a dealership or privately, the difference between the sale price of the vehicle and the agreed GMFV is known as your equity.

For example:

GMFV = €10,000

Sale Price = €12,000

Equity = €2,000

You can choose to exchange the vehicle, or use the equity, as part of the deposit for a new vehicle.

Volkswagen Financial Services’ PCP product is based on the future value of the vehicle. That value is determined by the wear and tear on the vehicle and calculated on the basis of a maximum mileage (or kilometre) usage. As part of the end of contract conditions, an excess charge applies where that usage is exceeded but only if you wish to hand back the vehicle to Volkswagen Financial Services and not in cases when you wish to avail of the option to sell or trade in the vehicle. The excess mileage (kilometre) charges vary from brand to brand, however the average charge is 6 cent per km.

As with all forms of Hire Purchase, until the final payment is made in settlement of the PCP agreement, the car is legally owned by Volkswagen Financial Services Ireland (although it is registered in your, the customer’s name).

It is important that we highlight a few distinctions.

a) Volkswagen Financial Services Ireland is a wholly owned subsidiary of Volkswagen Financial Services AG.

b) The PCP product, which is a form of Hire Purchase Agreement, is primarily regulated under the Consumer Credit Act 1995.

c) Dealers are authorised as intermediaries by the Competition and Consumer Protection Commission.

In addition to the regulations referred to above, the rights and protections for consumers in respect of PCP are provided for within other regulations uch as general contract and provision of services law, data protection and e-privacy law among others.

Please note that this page describes the characteristics of Hire Purchase from Volkswagen Financial Services, terms from other providers may vary.  For more details about VWFS including terms and conditions, visit VWFS.ie