Contract Purchase is a method of acquisition similar to Hire Purchase, but in this case monthly rentals can be kept low by agreeing a lump sum at the end of the term, referred to as the Guaranteed Future Value.

• You agree an appropriate deposit

• You make monthly or quarterly payments throughout the agreement term

• The monthly rentals are kept low by agreeing a lump sum at the end of the term. This amount is called the Guaranteed Future Value (GFV) and is based on the mileage you expect to do over the period

• At the end of the agreement you have four options:
i) Pay off the final lump sum and keep your vehicle
ii) Extend the agreement by spreading the balloon payment over a further agreed period
iii) Return your vehicle, freeing you from any further obligations apart from an excess mileage charge if the estimated mileage has been exceeded, and damage charges over and above fair wear and tear
iv) It may be possible to trade in your vehicle