Can I use an independent garage if I have a car on PCP finance?

Personal Contract Purchases have grown in popularity during recent years, but are motorists fully aware of the terms of their PCP finance agreements?

When it comes to your rights and getting your car serviced, you can happily get your car serviced by an independent garage without losing your warranty. However, there is something else you need to consider if your car is financed using a PCP plan - the GFV.

One of the main attractions of using PCP car finance is that the company providing it will guarantee that the value of the car at the end of the term will at least cover the outstanding settlement figure.

This is called the Guaranteed Future Value or GFV (in some contracts it may be called a Guaranted Minimum Future Value or GMFV) and it means that you can simply give the car back with nothing outstanding to pay at the end of the term.

The GFV is based on a car with no damage, limited mileage and a full manufacturer service history. This means that if you decide to use an independent garage before the end of the term, then the finance company can either refuse to honour the GFV or charge you a hefty penalty fee.

Read the terms of your personal contract purchase carefully

Do not rely on the dealer to explain the full terms and conditions of any finance agreement. Remember, they are simply trying to make a sale and may leave out information that would put you off signing on the dotted line. Make sure you read the terms of your personal contract purchase, especially the part that talks about when you can and can’t claim your GFV.

Is it ever safe for PCP finance users to go to an independent garage?

Yes, you can have your car serviced wherever you like if any of the following are true:

• You are not planning on claiming the GFV at the end of the agreement (so not planning to return the car at the end of the term)
• Your contract does not require you to have a full manufacturer service history when claiming on the GFV

To sum up, if you intend to keep your car at the end of your agreement, you can go ahead and use any approved independent garage you want, worry free. But if you intend to give the car back at the end of the agreement, you should be careful who you use to avoid incurring any hefty fees.