Can you negotiate GFV?

GFV is usually fixed by the lender based on market data and depreciation rates, so it’s not typically negotiable. However, you may influence the deal by adjusting factors like the deposit, contract length, or mileage allowance.

Yes, GFV is guaranteed by the lender as long as you stick to your contract terms. Exceeding mileage limits or returning a damaged car may reduce the amount you receive if you hand the car back.

What is the difference between GFV and balloon payment?

The GFV is the predicted future value of your car at the end of your PCP contract, while the balloon payment is the actual amount you’d need to pay if you decide to buy the car. In most agreements, these figures are the same.

Can I end my PCP agreement early?

Yes, you can usually end your PCP agreement early by paying the settlement figure. This amount may be higher or lower than the GFV depending on market conditions and how long you've had the car.

What if I exceed the mileage limit on my PCP agreement?

If you go over the agreed mileage, it could affect the GFV and you may face additional charges. It’s important to estimate your annual mileage accurately at the start of your contract to avoid unexpected costs.

Guaranteed Future Value (GFV) Explained

Q: How does GFV work in car finance?

GFV is set by the lender at the start of your PCP agreement based on factors such as make, model, mileage, and expected depreciation. It influences your monthly payments and your options at the end of the term, such as returning the car, trading it in, or paying the balloon payment to keep it.

Q: What is Guaranteed Future Value (GFV)?

Guaranteed Future Value (GFV) is the estimated value of your car at the end of a Personal Contract Purchase (PCP) agreement. It helps determine your monthly payments and what you may need to pay if you choose to buy the car at the end of the contract.

Written by Joe Achillies Updated 22 Oct 2025

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In car finance, you may come across the term Guaranteed Future Value (GFV). It’s an important part of Personal Contract Purchase (PCP) agreements in particular, and could impact both your monthly payments and the choices available at the end of your contract.

To help you understand whether a PCP deal is the right choice for you, we’ve explained GFV meaning, how it works and the pros and cons.

What is Guaranteed Future Value (GFV)?

So, what is GFV in car finance? Simply put, Guaranteed Future Value is the estimated value of your car at the end of your PCP agreement, after depreciation.

Unlike Hire Purchase (HP) where every payment goes towards eventually owning the car, with PCP, your monthly payments cover the car’s depreciation, plus the interest.

So, lenders calculate the car’s GFV before you sign the agreement. When a lender sets the GFV they look at a range of factors, which may include:

The car’s make, model, and age
Predicted annual mileage
Market trends and historic resale values
Expected depreciation over the contract length

All these factors help them predict how much the car will be worth at the end of your loan term, and therefore how much you may need to pay.

How Does GFV Work in Car Finance Agreements?

Understanding GFV is important because it impacts the size of your monthly payments, and what happens at the end of your loan term. So, what does GFV mean when buying a car exactly?

Monthly payments and GFV

The higher the GFV of your car, the lower your monthly repayments might be. This is because if the GFV is higher, the car is expected to hold its value better, so the difference you’re paying off is smaller.

New cars tend to lose value faster than used ones, which means monthly payments for a brand-new vehicle could be higher.

What happens at the end of the term?

Understanding GFV is really important at the end of a PCP deal. You’ll typically have three options at the end of your contract:

Hand the car back – Return the vehicle with nothing more to pay, provided you’ve stayed within mileage and condition limits.
Trade the car in – If your car is worth more than the GFV, you could put that equity towards a deposit on a new agreement.
Pay the balloon payment and keep the car – If you want to own the car at the end, you have to pay the ‘balloon’ payment, which is usually the same as the GFV.

GFV vs Balloon Payment - What’s the Difference?

In many PCP agreements, the balloon payment is set at the same value as the Guaranteed Future Value.

So, GFV and balloon payment are effectively the same figure, but they’re used in different contexts.

GFV is the guaranteed value set by the lender for what the car will be worth at the end of your contract. The balloon payment is the amount you’d actually pay if you choose to buy the car outright.

What are the Pros and Cons of GFV?

Pros:

Lower monthly payments: Because you’re not repaying the full cost of the car, just the depreciation, monthly payments could be lower compared to HP.
Flexibility at the end of the agreement: Flexibility is a big plus with PCP. You don’t have to decide whether to buy, return, or upgrade your car until your contract ends.
Option to walk away or upgrade: If your car’s market value falls below the GFV, you could return it without being out of pocket. Or, if it’s worth more, you could trade it in and put the equity towards a new deal.

Cons:

You don’t automatically own the car: Unless you make the balloon payment (pay the GFV), you’ll have to hand the vehicle back at the end of the term.
Exceeding mileage limits or damage could reduce the GFV: If you go over the mileage cap or the car is in poor condition when you hand the car back, extra charges may apply.

Why Choose Car Finance 247?

At Car Finance 247, we work with a wide panel of lenders, including those who could offer PCP deals. We will try and help you find options tailored to your budget and preferences.

Here’s why drivers choose us:

Access to a wide panel of trusted panel of lenders
A dedicated account manager to guide you from approval to signing your agreement
Rated ‘Excellent’ on Trustpilot

The takeaway

Guaranteed Future Value plays a key role in PCP car finance. It could affect your monthly payments and the choices you have at the end of your agreement, so it’s really important to understand before you agree to anything.

Thinking of exploring PCP car finance? Get a quote now to get started.