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 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).

Find and finance your next vehicle through PCP

How does PCP actually work?​

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 vehicle the back to us
Retain – Keep the vehicle by paying the optional final payment
Renew – Trade it in for another vehicle

For a quotation, help, or advice contact your local dealership and ask to speak to one of our Business Managers at your local %group_name%

What are the advantages of PCP?

Monthly payments on a vehicle financed by PCP are usually lower than if your vehicle is financed by a Hire Purchase agreement.
If you decide not to buy the vehicle, you can simply walk away when you've made all the payments.

Similar to PCH, you can drive away a new or used vehicle every few years (dependent on the chosen term) without worrying about selling it on.

If your Vehicle is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new Vehicle.

What should you consider when option for a PCP?

Monthly payments on a Vehicle financed by PCP are usually lower than if your Vehicle is financed by a Hire Purchase agreement.
If you decide not to buy the vehicle, you can simply walk away when you've made all the payments.

Similar to PCH, you can drive away a new or used Vehicle every few years (dependent on the chosen term) without worrying about selling it on.

If your vehicle is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new vehicle.

Can I settle my PCP agreement early?

If you want to buy the vehicle 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 vehicle without settling the finance.

You won’t own the vehicle until you have made all of your repayments.

You’ll need to keep the vehicle properly insured, maintained and in your possession until the full value is paid off.