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).
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.
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.
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.
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.