What are balloon payments and how are they set? We explain everything you need to know about this figure.
If you choose a personal contract purchase (PCP) lease, you’ll have the option of purchasing the car you’ve been driving at the end of your car lease.
To take full ownership of your car at the end of your PCP lease, you’ll have to make one final large payment. This is referred to as the balloon payment, and it represents the car’s guaranteed minimum future value (GMFV).
In this article, we’ll explain everything that goes into calculating balloon payments, how they work, and how an all-inclusive subscription with Onto means you’ll never have to worry about hidden fees.