Personal Contract Purchase (PCP)

Increasingly popular, especially where people are opting out of company car schemes, Personal Contract Purchase (PCP) is one of the best ways you can purchase a new or used car. The initial deposit and monthly payments are usually lower than conventional Hire Purchase. Based on mileage and age, your car's minimum guaranteed future value is calculated and then deferred as a 'final' payment at the end of the agreement. Your payments are spread over the agreed period, most commonly between 24 and 48 months, and at the end of the agreement you have much greater flexibility with a minimum guaranteed future value (MGFV) and a choice of four options:

• You buy the car by paying the minimum guaranteed future value (MGFV)
• You can part-exchange the car for another vehicle and use any equity as deposit.
• Re-finance the minimum guaranteed future value
• Return the car and walk away (Subject to terms and conditions)

What to do first?

Determine your annual mileage, desired term and deposit. The minimum guaranteed future value is then calculated, together with your monthly payments. You can then decide if the PCP is best for you.

What about excess mileage?

At the beginning of the agreement, you determine your annual mileage for the agreement period. If you decide to return your car to the finance company and walk away and the mileage exceeds that agreed, you simply pay a fixed amount per extra mile.

What about 'wear and tear'?

At the end of the agreement the vehicle may be worth more than the agreed minimum guaranteed future value if it is well maintained, so it is in your own interest to minimise the vehicle's 'wear and tear'. 

Finance packages are subject to status and finance company acceptance. UK residents only.