Crashing a PCP bike

[featsoclay]

I have a question about personal contract purchase (PCP), which seems to be a popular type of finance but which I only just learned about in RiDE.

It seems that a key element of PCP is the guaranteed final value. The reason PCP works, as far as I can work out, is that the dealer "owns" the GFV. If you want to keep the bike, you have to pay the GFV. If you decide to walk away, the dealer can recoup (most of?) the GFV by selling the bike used.

So what happens if you crash a bike you're financing via PCP? If it's badly damaged, it's obviously not going to be worth the GFV at the end of the contract, even if you get it fixed up. You're not going to want to pay the GFV to keep the bike, and when you walk away, the dealer's not going to recoup as much by selling it.

So do you have to pay some kind of penalty or compensation to the dealer for not returning the bike in good condition? I imagine that you'd be protected in the same way you would be if you owned the bike outright: if you've got comprehensive cover, or if someone else was at fault, you'll get insurance money.

Anyone know how this works?

[Davenaylor]

I use PCP on the car. I wouldn't rely too much on a comprehensive insurance payout. They will pay what they believe the car is worth and it might not be the same as the amount owed.

GAP insurance is your friend and I'm surprised RIDE didn't mention this to be honest. Sometimes I think they are on the take from the main brands the way they go nuts for finance deals. Still, good mag.

[Kickstart]

Hi

I would expect that fully comp insurance would be a condition of the pcp deal, possibly with gap insurance as well

All the best

Keith
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Traxpics, track day and racing photographs - Bimota Forum - Bike performance / thrust graphs for choosing gearing

[clancy]

This is why gap insurance exists, to cover the difference so your not left paying off a crashed bike basically. Anyone doing this sort of finance would be stupid not to get gap insurance. With it, you should have little problems
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KLX 300r

[GPC]

You also need to watch the mileage limitations, I had a car on a PCP and the Dealer had the annual mileage wrong on the paperwork, the potential excess charges would have been a third of the GFV. I part exchanged for a different make and didn't loose too much

[soforene]