Personal Contract Purchase (PCP)

What Is PCP Car Finance?

PCP car finance takes the form of a long-term rental, whereby you pay for the car monthly while you are using it. The difference with PCP car rental is the numerous options you have at the end of the deal depending on whether you want to keep the car or change it for another one.

Generally, PCP car finance deals last for three to five years and before you are accepted into a PCP car finance deal, you will need to pass a credit check. Unlike other forms of car finance, the credit check will not test your affordability, so it’s important you make sure your typical monthly income can cover the additional cost of your car finance payments.

With PCP car finance, the amount you borrow is based on the amount the finance company thinks the car will lose in value over the duration of your contract. Over the term of your contract, you will pay this amount back, plus the interest.

If you decide to take out a PCP car finance deal, you will need to be aware of the charges you can incur. There will usually be a mileage limit, which means if you exceed it, you may have to pay an additional fee on top of your repayment charge. The same also applies for any damages or excess wear and tear on the car.

Steps to PCP Car Finance

At Best Online Car Finance, we make it as simple as possible for you to finance the car that you want.

1. Make Your Application

By making your application in the first instance, we can assess your suitability and perform a credit check to make sure that PCP is right for you. 

2. Choose Whether To Pay A Deposit

Once your application is complete, you may want to consider paying a deposit. We do offer no deposit car finance, however by paying a deposit you would reduce your monthly payments and pay less interest overall.

3. Drive Away Your New Car

Once you have passed your credit check and you have paid a deposit, you will be free to drive your new car. However, at this point you don’t own the car, technically you are renting it long term, so there will be some restrictions to consider when you are using it.

4. Make A Decision When Your Contract Is Up

Unlike other forms of car finance, you’ll need to decide what you want to do with the car at the end.

What are your choices?

  • Return the car – simply return the car once your deal has ended and all your repayments have been made in full.
  • Pay the resale value and keep the car – if you don’t want to stop using the car, then you can make a balloon payment which will be the amount the car would be worth if you were to resell it at the end of your contract.
  • Use the resale value to put towards buying another car, perhaps through hire purchase or securing another PCP deal – At the end of your deal, the car you used will be worth slightly more than the balloon payment, the dealer will then ask if you want to use the money as a deposit for a new PCP deal on a different car. This option is popular among those who like to change their car often.

What if you want to end your PCP car finance deal early or cancel it?

You may be in the position where you want to end your PCP car finance deal or cancel it, for whatever reason. If this is the case, then you must have paid at least half of the payments – this is known as ‘voluntary termination’. If you haven’t paid half, then you will need to pay the difference.

Interested In PCP Car Finance?

If you would like some more information regarding PCP car finance, or you would like to get the ball rolling, then make an application or get in touch with us.

Drive Away
In Your Shiny New Car

We're Here To Help

Can we help you further in applying for car finance? Get in touch with us now.