What is a balloon payment?

A balloon payment (also called an optional final payment) is a final lump sum made at the end of a PCP finance agreement. If you choose to keep the vehicle, a balloon payment is what’s needed in order for you to fully own the car, van or motorbike. This amount will be much larger than the previous monthly repayments, which is why you'll also have the option to either refinance the outstanding balloon payment or to hand the car back to the finance company. Find out more about balloon payments and how they work in our dedicated blog.