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 Funding solutions explained Finance Options Below we outline the finance products available to you to fund your new car purchase. Our team are available to assist with any questions, whether up front or throughout the journey should you wish to purchase online. Enquire About Finance

  

What is Personal Contract Purchase (PCP)?

Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or a used car.

It is similar to a Hire Purchase/Conditional Sale 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) / Conditional Sale (CS) is that your monthly instalments are paying off the depreciation of the car, 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 car. The balloon payment is often referred to also as the Guaranteed Future Value (GFV).

How does PCP actually work?

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When you have chosen your vehicle, you will then agree your annual mileage and decide on the agreement term with one of our Business Managers.

We will then determine the Guaranteed Minimum Future Value (GMFV) of the vehicle at the end of the agreement and work out a deposit and monthly amount that works for you.

At the end of your agreement you will then have three options:

Return – Simply return the car the back to your finance provider - excess mileage and condition charges may apply
Retain – Keep the car by paying the optional final payment
Renew – Trade it in for another car

For a quotation, help, or advice contact us and ask to speak to one of our Business Managers.

What are the advantages of PCP?

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  • Monthly payments on a car financed by PCP are usually lower than if your car is financed by a Hire Purchase / Conditional Sale agreement.
  • If you decide not to buy the car, you can simply walk away when you've made all the payments - excess mileage and condition charges may apply.
  • Similar to PCH, you can drive away a new or used car every few years (dependent on the chosen term) without worrying about selling it on.
  • If your car is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new car.

What should you consider when opting for PCP?

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  • If you want to buy the car you will need to pay your final balloon payment (the Guaranteed Future Value).
  • Similar to PCH, you will need to agree on a mileage allowance at the beginning of your contract and there may be excess mileage charges if you exceed this.
  • You won’t be able to sell the car without settling the finance.
  • You won’t own the car until you have made all of your repayments.
  • You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.

Can I settle my PCP agreement early?

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The answer is yes, you can end your PCP finance agreement early. You can apply to your finance provider for a settlement figure at any point during your PCP finance agreement. Once the settlement figure has been paid you will have full ownership of your vehicle.

Find and finance your next vehicle through PCP

What is Hire Purchase (HP) / Conditional Sale (CS)?

Hire Purchase/Conditional Sale is a way to finance buying a new or used car. You will normally pay an initial deposit and will pay off the entire value of the car in monthly instalments. When all the payments are made, the Hire Purchase / Conditional Sale agreement ends, and you own the car outright.

What are the advantages of HP/Conditional Sale?

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  • You’ll be able to drive away a car that you may not have managed to buy outright.
  • Unlike a PCP or PCH contract, you won't need to estimate your mileage at the start of your Hire Purchase / Conditional Sale agreement, so you'll avoid excess mileage charges.
  • Once you’ve made your final monthly payment, including the option to purchase fee, you'll have full ownership of the car.

What should you consider when opting for HP/Conditional Sale?

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  • Monthly payments may be higher than some other finance options, such as PCP, as you're paying off the full value of the car.
  • You won’t be able to sell the car without settling the finance.
  • You won’t own the car until you have made all of your repayments.
  • You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.

Can I settle my HP/Conditional Sale agreement early?

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The answer is yes, you can end your HP/Conditional Sale finance agreement early. You can apply to your finance provider for a settlement figure at any point during your HP/Conditional Sale finance agreement. Once the settlement figure has been paid you will have full ownership of your vehicle.

Find and finance your next vehicle through HP