What is PCP Finance?
Affordable, flexible, tailored finance
Personal Contract Purchase (PCP) is a flexible vehicle financing option that allows you to drive a car with lower monthly payments compared to Hire Purchase (HP).
At the end of the agreement, you can choose to buy the car, return it, or exchange it for a new one. This makes PCP popular among those who like to change cars frequently.
How Does PCP Work?
Deposit – You pay an initial deposit, usually 10% or more of the car’s value. There are also zero deposit options available.
Monthly Repayments – Fixed lower monthly payments over an agreed term, typically between 24 to 48 months.
Guaranteed Future Value (GFV) – A final ‘balloon’ payment (GFV) is set at the start of the agreement, which you can pay to own the car.
End-of-Term Options – At the end of the term, you can:
Pay the final balloon payment to own the car.
Return the car with no further obligation (subject to mileage and condition).
Exchange the car for a new one under a new PCP deal.
Mileage Limitations – PCP agreements usually have mileage restrictions, and exceeding them may incur additional charges.
Benefits of PCP
Lower Monthly Payments – Compared to HP, as you’re not paying off the full value of the car.
Flexibility at the End – Choose to buy, return, or exchange the vehicle.
Newer Cars More Often – Ideal for those who like to upgrade regularly.
Option to Walk Away – No obligation to buy the car at the end of the agreement.
Considerations Before Choosing PCP Finance
1. Ownership
You do not own the car unless you pay the final balloon payment.
2. Payment Schedule
Exceeding the mileage limit can result in extra charges.
3. Higher payments
PCP may be more expensive in the long run if you choose to keep the car.
FAQs
What happens if I miss a payment?
Missing payments could lead to financial penalties or even repossession of the vehicle.
Can I end my PCP agreement early?
Yes, but you may need to pay an early settlement fee and cover any negative equity.
Is PCP available for those with bad credit?
PCP is available, but interest rates may be higher for those with lower credit scores.
Do I need a deposit for a PCP agreement?
Most lenders require a deposit, typically around 10%, though some may offer no-deposit options.
What happens at the end of the agreement?
You can pay the final balloon payment to keep the car, return it, or trade it in for a new deal.
Can I modify the car during the PCP term?
Modifications may not be allowed, as the finance company technically owns the car until the final payment is made.
CAr finance
calculator
This quick and easy tool helps you see what you can afford. Enter a few quick details to receive an immediate finance estimate. The sliding scales let you adjust things like deposit size or loan term to see how it changes your monthly payments.
Rates from 9% APR. Representative 18% APR. Car Loan First is a broker not a lender.
| Cash Price | Deposit Term | APR (Fixed) | Payment | Total Interest | Total Amount Payable | |
|---|---|---|---|---|---|---|
| Representative Example | £8,000.00 | 60 Months | 18% APR | £203 | £4,189 | £12,189 |
Why choose us?
PCP finance made simple
PCP finance offers a cost-effective way to drive a new car with lower monthly payments while keeping your options open at the end of the agreement. If you like upgrading your vehicle regularly and prefer financial flexibility, PCP may be the right choice for you.
Finance Made Just for You
We know everyone’s journey is unique. That’s why we create Hire Purchase agreements tailored to your individual needs, ensuring the vehicle and the loan fit perfectly into your lifestyle and budget.
Your Repayments, Your Way
Take control of your payment plan! Whether you prefer larger payments over a shorter term or smaller ones spread out over time, we’ll help design a repayment schedule that works for you. Don’t worry about the details-we’ve got it all covered.
Guidance You Can Count On
First-time applicant or seasoned finance veteran? Either way, our expert team is here to make the process a breeze. With honest advice, a trusted lender network, and seamless support from start to finish, we’ll get you on the road in no time!
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