Personal Contract Purchase, also known as PCP, is a popular way of financing a vehicle and is usually based upon a Hire Purchase (HP) agreement. The main difference is that the vehicle’s value at the end of the agreement is calculated at the start and is then deferred. This is referred to as the Guaranteed Minimum Future Value (GMFV) and is based on various factors including the starting mileage, the user’s projected annual mileage and the age of the car.
At the end of a PCP agreement the user has three options:
*The car must be in good condition and within the agreed mileage
Under a PCP agreement, monthly instalments are based on the amount borrowed minus the GMFV.
You pay an initial deposit – normally 10-30% – and then the balance in fixed monthly instalments over an agreed term (24-48 months). At the end of the contract you can choose to hand the car back with nothing more to pay*, part exchange it and use any equity (the difference between the trade-in value and the GMFV) towards the purchase of your next car, or simply pay off the GMFV and keep the car.
PCPs are great if you want to change your car on a regular cycle and enjoy fixed monthly payments that are lower than a traditional Hire Purchase.
Under a Hire Purchase agreement, you usually pay a deposit at the start of the agreement. You then pay the rest of the value of the car in instalments, over a period of between 3 and 5 years.
A Balanced Payment Plan offers the benefits of a fixed monthly payment, however tracks the changes in the finance house base rate, LIBOR or bank base, depending on the agreement.
PCP is a popular way of financing a vehicle and is usually based upon a Hire Purchase agreement. The main difference is that the vehicle’s value at the end of the agreement is calculated at the start.
We have access to a number of specialist lenders that will look at high value vehicles over £1 million, classic and exotic cars, refinancing existing deals, equity release or even assets other than vehicles.
Representative example - BMW M135i
£31,050
| Deposit | £4,000 |
| Amount of credit | £27,050 |
| Total amount payable | £34,348.28 |
| Final instalment | £843.98 |
| Duration of agreement | 36 months |
| Regular monthly instalment | £842.98 |
| Representative APR | 7.9% |
| Type of interest | Fixed |
*This HP finance example is for illustration purposes only, please contact one of our concierge team to get your tailored quotation.
Call us and get a tailored quote on your chosen car (or apply online).
When you are happy, we’ll create and submit your application to your chosen lender.
Once approved, pay a deposit to the dealer and sign & return the finance documents to us.
We pay the dealer - you pick up your new car!
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Alex Baldwin was very efficient and helping me process my car finance. He kept me updated on all stages of the process. Highly recommended and very happy with the service.
cannot recommend Jack enough, sorted finance on my deal, and went smooth considering the dealers rates were awful compared to the magnitude
Got offered a HP finance APR of 6.8% couple of months ago compared to Charles and dean which was at 9.8%. Many thanks to Tom for arranging this.
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