With Personal Contract Purchase (PCP) you can drive the car you want and keep your options open at the end of the finance agreement. Here’s a step-by-step guide to how a PCP works:
• You choose the vehicle you like.
• You choose the repayment period that’s right for you.
• Agree a deposit and a regular payment to suit your budget.
• Agree a maximum annual mileage.
• The finance company then decides a guaranteed minimum future value for your vehicle, which then becomes your optional final payment.
• At the end of the agreement you have the freedom to choose one of three options: part-exchange your vehicle for another one*, pay the final payment and keep the vehicle, or return it to the finance company**.
Benefits of Personal Contract Purchase
• You drive the car you want with your options open; you do not have to make any decisions until your agreement ends.
• You can change your car potentially more regularly; every two to five years*
• Your car has a guaranteed minimum future value, so you don’t have to worry about depreciation.
• There’s an optional final payment at the end of the agreement, so you can benefit from reduced regular payments.
• Fixed regular payments mean it’s easy to budget.
• You can choose what to do at the end of the agreement: part exchange your car for another one*, keep it or return the car to the finance company**.
• It gives you more car for your money. Because the payments are probably less than you think, you may decide to upgrade or add some optional extras.
* A new finance agreement will be subject to status. ** Excess mileage charges and excess wear and tear charges may be payable upon return of the vehicle.
