Rates from 8.9% APR  - 8.9% APR Representative
Personal Contract Purchase - PCP

Personal Contract Purchase - PCP



PCP Car Finance

We know that choosing car finance is something that takes time and that it needs commitment and consideration.

Here at Magnitude Finance, our team have over 35 years of experience, making us the perfect choice when it comes to financing your dream vehicle. Our proven ability to negotiate, broker, and secure the best Personal Contract Purchase (PCP) car finance deals for customers is matched only by our professional and personal customer service. We ensure that the entire car finance process is a comfortable ride from start to finish.

From the moment you get in touch with our team, we’ll make sure to fully understand your requirements — so we can offer you the best, and most affordable finance deal available.

Whether you are looking to secure finance for your first vehicle or are setting your sights on your dream car, Magnitude Finance offers you top-notch service to help you find the best lenders. We answer some common Frequently Asked Questions in relation to PCP below.

Looking for a quote? Try our free online finance calculator here!

8.9% APR Representative. We are a credit broker, not a lender.

PCP Finance

What is Personal Contract Purchase Finance?

Personal Contract Purchase is one of the most popular ways to broker a finance agreement on a vehicle. Not only is it cost effective with a flexible deposit, but it also gives users three options to choose from (keep, trade, or return) at the end of the contract.

Introduced in the late 90s, Personal Contract Purchase has become one of the most chosen methods for leasing a vehicle. Built upon a traditional Hire Purchase (HP) agreement, the biggest difference between both finance options is the value of the vehicle, which is decided at the start of the initial contract and then deferred until the end.

This value, also known as the Guaranteed Minimum Future Value (GMFV), is determined by a list of criteria: such as the starting mileage, an annual mileage limit as projected by the user, and the car’s age.

It’s important to remember that unless you choose to pay this GMFV at the end of your finance deal – the car is not yours.

PCP car finance works as a form of leasing, so making any changes or exceeding the limits outlined in your contract may have financial repercussions.

At the start of a PCP finance agreement, you will be expected to pay a starting deposit. This is normally a figure between 10 to 30% as standard, before starting to pay off your balance in fixed monthly payments over a pre-agreed period of time.

What are the benefits of this type of arrangement?

Personal Contract Purchase (PCP) finance offers the advantage of consistent monthly payments, which are typically lower than those of traditional Hire Purchase (HP) finance plans, for a predetermined duration.

This kind of agreement does allow a more flexible ownership cycle, with the chance to swap your car more regularly if you want to, along with the bonus of newer cars and the benefits that come with those (manufacturer warranties, safety features, technology). We find on average PCP customers tend to switch around 3 years into a 4-year agreement, making the most of any positive equity they may have accrued (not guaranteed) as a deposit for their next car.

8.9% APR Representative. We are a credit broker, not a lender.

Try Our Car Finance Calculator
PCP Finance
PCP Finance

What happens to my car on a PCP finance agreement and what are the risks?

At 24 to 48 months into your payment period, customers have three choices available.

You might decide to hand the car back after your payment period ends and walk away with nothing more to pay. It’s important to note that the car must still be in excellent condition and within the agreed mileage limit – otherwise, you could face further penalties, such as excess mileage charges. If essential maintenance has been neglected, you could also be responsible for the cost of repairs.

But if you are keen to keep the keys, all you have to do is pay off the remaining GMFV and drive away — the vehicle is now yours. However, if you want to change your vehicle, you can simply part-exchange your existing vehicle.

As with all products within the industry, it is still important to be mindful when taking out a Personal Contract Purchase (PCP) finance agreement.

Despite its obvious benefits in terms of flexibility and lower rates, there can be some situations where a PCP agreement might become more expensive in the long run when compared to a Hire Purchase plan.

Opting for a smaller deposit at the beginning of your agreement might seem like a sensible choice, but it can also cause issues should you exceed the limits.

Financial penalties such as excess mileage charges will not only hit your wallet; they are also liable to put you at risk of negative equity too, which is a frequent mistake made by people navigating this part of their finance journey.

At Magnitude Finance, we’re here to help. Our experienced and discerning financial experts will be able to offer you tailored advice and offer support on car finance options where needed, ensuring that everything is handled to the very best standards.

You can find out more about PCP finance by heading over to our Car Finance Academy. Compiled by our team of in-house experts, this comprehensive guide is your one-stop roadmap when it comes to the world of car finance.

Which is the better: Hire Purchase or PCP finance?

Whilst both options have their advantages, the best pick for you will ultimately come down to your preferred payment schedule and what you’d like to do with the vehicle once your agreement period is up.

PCP finance is a popular alternative to using traditional loans to secure funding on a chosen car. This is because the future value of the chosen vehicle is calculated and used as the final payment at the end of the agreement term – so you’re safe from fluctuations in price.

As long as you deliver those fixed monthly payments on time, what you do with the vehicle at the end of the contract is entirely your choice – giving you the freedom to change your mind throughout.

We also know that circumstances change and you may wish to settle your finance agreement early. With PCP finance – as a regulated agreement under the Consumer Credit Act – you have the option to do this. At Magnitude, our team of financial experts are on hand to help smooth out the process, making sure that you get an accurate quote that covers the exit fee.

This fee is the amount still owed, plus potential penalty charges that may be accrued. This is usually an exit fee totalling at 58 days interest charge. As with all our leading financial products, we can discuss the best options for you and your situation, ensuring that you drive away happy.

You can also determine this figure by using our state-of-the-art settlement calculator or get an accurate and straightforward quote by getting in touch with our team directly.

Please note that this calculator does not take exit fees into account when producing a number.

8.9% APR Representative. We are a credit broker, not a lender.

Try Our Car Finance Calculator
PCP Finance
PCP Finance

How can Magnitude Finance help you with your bespoke Personal Contract Purchase package?

Whether you have a set goal for your car in the future or simply wish to find out more about the car finance options available to you, we’re on hand whenever and wherever you need us.

Our customers trust Magnitude Finance to obtain the very best finance solutions.

We know your time is precious, which is why clients old and new can always get in touch with our team of dedicated car finance experts. From face-to-face meetings to easily accessible quotes from our industry-leading calculators, simple online contact forms, or a good old-fashioned phone call, we pride ourselves on providing a cohesive, convenient service.

As well as being fiercely independent, we’re proud of the proven track record we have in helping clients get behind the wheel of their dream cars. A large number of our team are self-confessed petrol heads, who love nothing more than rising to the challenge of tailoring the ultimate bespoke PCP finance packages for all our clients.

With decades of experience in car finance, we know how stressful and time-consuming the financing process can be. That’s why our finance specialists handle the research, negotiation and sourcing – so you can spend your valuable time on what matters.

When it comes to the end of your PCP finance deal, we can also offer further assistance should you wish to continue your journey with us. From refinancing to choosing another finance product, we can fuel the funding for whichever powerful purchase comes next.

How do I get a PCP quote from you?

At Magnitude Finance, we’re determined to make every step of the finance process simple, smooth and straightforward. In just a few clicks, our free online PCP car finance calculator will give you the best quote for your chosen vehicle. All you have to supply is the details for the car of your choice, such as the spec, make, model and year – and our handy tool will produce a precise figure. We regularly update this Car Finance Calculator so our clients are always at the forefront of the latest model releases and industry upgrades.

Getting a PCP finance quote from us couldn’t be easier. The choice is yours here, you can use our free online finance calculator for a quote in just a few clicks, you can call us on 01943 660703, use our Live Chat or WhatsApp facilities, or simply fill in our handy contact form at the bottom of the page – and a member of our dedicated team will get in touch.

At Magnitude Finance, we always work with our clients in mind. That’s why we work tirelessly to create the best packages for you and your interests, offering advice and support when needed. When it comes to supplying customers with no-nonsense, no-obligation quotes, we’re the perfect pit stop.

If you want to get the most out of your PCP finance package, use our quick, easy and accurate Car Finance Calculator – or for a direct quotation, why not chat with our team of friendly specialists today?

PCP Finance

If you feel PCP is the right product for you, try our free online finance calculator for a quote in just a few clicks!

8.9% APR Representative. We are a credit broker, not a lender.

Get A Quote