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Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or a used vehicle.
It is similar to a Hire Purchase agreement as you will usually pay an initial deposit, followed by monthly instalments over a term typically between 18 to 48 months.
What makes PCP different to Hire Purchase (HP) is that your monthly instalments are paying off the depreciation of the vehicle, and not its entire value, over the course of the term. Then, when you get to the end of your agreement, there is a final, balloon payment that must be made if you want to keep the vehicle. The balloon payment is often referred to also as the Guaranteed Future Value (GFV).
With PCP, you make a deposit followed by monthly payments, based on the car’s expected depreciation. At the end of the term, you can make a final balloon payment to keep the vehicle – or, you can exchange it for another vehicle, or return it, with nothing more to pay.
Yes, most PCP agreements allow early settlement. Contact our team to understand the specific terms.
Exceeding your mileage limit on a PCP agreement usually results in an additional charge per mile, as specified in your contract. It’s a good idea to estimate your annual mileage beforehand to avoid unexpected fees at the end of your term.
Hire Purchase is a way to finance buying a new or used vehicle . You will normally pay an initial deposit and will pay off the entire value of the vehicle in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the vehicle outright.
HP offers straightforward ownership with predictable payments and no mileage restrictions; it’s ideal for those who are looking for long-term ownership from the get-go.
Consider that monthly payments are typically higher with HP, as you’re paying for the entire value of the vehicle.
Yes, most HP agreements can be settled early. Contact us for information on early repayment terms.
Yes, most HP agreements allow you to make extra payments to reduce your balance. This can shorten your payment term or reduce the overall interest cost. Check with us for details on how additional payments may affect your agreement.
In certain instances, yes. Basically, your credit score impacts the interest rate and terms of your financing:
We’re happy to discuss options based on your unique situation.
