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.
PCP Finance - The world's most popular car finance product
What is Personal Contract Purchase
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:
- Pay the GMFV and keep the car
- Trade the car in and use any equity towards their next car purchase
- Hand the car back with nothing more to pay*
*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.
How does it work?
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.
What are the benefits of Personal Contract Purchase?
- Flexible deposit options at the start
- Lower monthly payments than Hire Purchase
- Fixed monthly payments throughout the term of the agreement
- Three options at the end of your agreement
- Easy to budget for your next car purchase
Why choose a PCP?
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.
Things to consider
- Charges – a PCP agreement could work out to be more expensive overall compared to a hire purchase agreement for an equivalent vehicle.
- If you decide to return the vehicle, make sure it is in good condition as you could be responsible for any repairs if it is not.
- Make sure you estimate your annual mileage with care as there will be charges for additional miles above the amount agreed.
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.
Balanced Payment Plan
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.
Personal Contract Purchase
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
|Amount of credit||£27,050|
|Total amount payable||£34,348.28|
|Duration of agreement||36 months|
|Regular monthly instalment||£842.98|
|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.
Our finance calculator and concierge
service makes financing your car simple.
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!
Magnitude offer finance for all cars ranging from £25,000 and up. Dependent on age and mileage different lenders will be made available as an option for your package.
Why choose Magnitude?
- Competitive rates
- Wide choice of agreements and lenders
- Expert advice
- Fast response times
- Ethical lenders
- Part of DSG Financial Services – 30 years of experience
Our experience is unrivalled
With over 30 years in business building strong relationships with consumers, dealers and manufacturers, no other prestige car finance specialist can match our experience.
As part of DSG Financial Services we have been able to negotiate the very best terms from our lenders on behalf of our customers, so you can expect lower rates than most of our competitors are able to offer – just try us and see.
Magnitude work in your best interests – not those of manufacturers or dealers – to always offer the best overall package for you.
Our concierge team loves helping our customers finance their dream car. Get in touch with them to see how we can do the same for you.
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.
Second time using magnitude now and once again a flawless experience, have dealt with Alex both times and will be sure to use him again, don’t hesitate before using these guys
Bought my 911 turbo through magnitude finance, was my dream car ever since I’ve been able to drive and they made it happen ! Look no further for your car financing ! Top class !