Answer
Aug 01, 2023 - 03:39 AM
Hello there,
That's a good question. Guaranteed Future Value lately has been an attractive prospect in car financing. Simply put, it offers an affordable way to drive a new car every few years. GFV is appealing because it's calculated according to the future cash value of a vehicle at the end of the finance contract. This results in significantly lower monthly repayments compared to a normal finance agreement.
While attractive, there are more conditions to abide to with GFV and the vehicle has to be returned to the dealer at the end of the agreement. Despite you paying the full amount, you don't really 'own' the vehicle, it's more car hire in a sense. Other conditions include sticking to maintainance schedules like servicing your car every year or at the specified mileage interval at approved service centres. There's also a set maximum amount of mileage you can drive according to the dealership. Lastly, the vehicle needs to be returned in a good undamaged condition while excluding normal wear & tear. If you don't abide to said conditions, you will be charged penalty fees.
When the contract ends, you can either trade-in, buy or return the car to the dealership. If you trade-in, you can choose GFV or another finance option for a new car or if you want to keep the car you can pay for it in full or refinance it. The refinancing generally will be a traditional finance agreement.
If you're able to abide to the conditions inherent of GFV, then it's a great option. However, if you drive over the mileages stipulated by the dealerships and or plan to keep the car afterwards, perhaps a traditional finance agreement may be better for you.
Hope this helps.
The AskAutoTrader Team.
That's a good question. Guaranteed Future Value lately has been an attractive prospect in car financing. Simply put, it offers an affordable way to drive a new car every few years. GFV is appealing because it's calculated according to the future cash value of a vehicle at the end of the finance contract. This results in significantly lower monthly repayments compared to a normal finance agreement.
While attractive, there are more conditions to abide to with GFV and the vehicle has to be returned to the dealer at the end of the agreement. Despite you paying the full amount, you don't really 'own' the vehicle, it's more car hire in a sense. Other conditions include sticking to maintainance schedules like servicing your car every year or at the specified mileage interval at approved service centres. There's also a set maximum amount of mileage you can drive according to the dealership. Lastly, the vehicle needs to be returned in a good undamaged condition while excluding normal wear & tear. If you don't abide to said conditions, you will be charged penalty fees.
When the contract ends, you can either trade-in, buy or return the car to the dealership. If you trade-in, you can choose GFV or another finance option for a new car or if you want to keep the car you can pay for it in full or refinance it. The refinancing generally will be a traditional finance agreement.
If you're able to abide to the conditions inherent of GFV, then it's a great option. However, if you drive over the mileages stipulated by the dealerships and or plan to keep the car afterwards, perhaps a traditional finance agreement may be better for you.
Hope this helps.
The AskAutoTrader Team.
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