Personal Contract Purchase Car Finance

What is Personal Contract Purchase (PCP)?

Personal Contract Purchase, more commonly known as PCP, is a way to finance a new or used vehicle. Similar to Hire Purchase (HP) financing, you'll make fixed monthly repayments over an agreed period of time. However, unlike HP, your payments will only cover the depreciation of the car, plus interest. This means you won't be paying the total cost of the car, so you won't own the car at the end of your contract.

At the end of your term, you will have the option to make a larger final 'balloon' payment, which will give you ownership of your vehicle. If you don't want to make this optional final payment, you'll return the car or part-exchange it.

At Autodosh, we act as a credit broker, not a lender. We work with a variety of trusted lenders who may help you find a financing option to suit your individual circumstances. Lenders may consider applicants from various credit backgrounds, but approval is not guaranteed, and lenders may go through additional affordability checks.

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How does Personal Contract Purchase (PCP) work?

Understanding how PCP car finance works is essential before committing to a contract. The process is simple:

Choose your vehicle

Select a vehicle from a reputable dealership.

Deposit payment

Some lenders may require an initial deposit.

Monthly payments

Make regular payments over a set term.

Balloon payment (optional)

If you want to keep your vehicle, you'll make one final payment.

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Buying a Vehicle with Personal Contract Purchase

If you're looking for greater flexibility, a PCP deal could be suitable for you. While ownership of a vehicle is appealing for some people, for others, the option to change vehicle type on a more regular basis might be more attractive.

If you're looking for other car financing options, you could also consider:

HP finance
Leasing

Personal Contract Purchase Advantages and Disadvantages

As with all types of financing, there are pros and cons to PCP. Payments are agreed at the beginning, but you might be subject to additional charges if you go over your mileage limit, for instance. Always do your own independent research first before committing to buy a car with any financing option.

Advantages of PCP

Used cars included.
Option to return or part-exchange the vehicle.
Typically lower monthly payments.
Flexibility.

Disadvantages of PCP

Mileage restrictions.
Final large payment if you want to keep the vehicle.
Repossession risk.
Potentially higher overall cost.
Potential charges for wear and tear.

PCP vs Other Types of Car Financing Options

PCP is a fairly flexible option for financing a car, however, this is not always a priority for some people. It's important to consider all options available to you before making a financial commitment.

Personal Contract Purchase vs Hire Purchase

The main difference between hire purchase and personal contract purchase is that you won't automatically own the car after the final payment. If you prefer ownership over exchanging, HP might be the more suitable option. Hire purchase financing also typically has no mileage restrictions, which could be appealing to someone who does more frequent driving.

Personal Contract Purchase vs Leasing

People often ask if personal contract purchase is the same as leasing, but they are quite different. Car leasing, unlike PCP, doesn't have the option for you to purchase the car at the end of your contract. You will essentially be hiring the car for a long-term period of time.

Personal Contract Purchase vs Personal Loan

With a personal loan, you will have immediate ownership of the vehicle. You won't have any restrictions on mileage or wear and tear either, as the vehicle is entirely your responsibility. You may be able to get a personal loan for financing a car through one of our lenders or your bank.

Apply For PCP Finance

Ready to explore your personal contract purchase options? Apply for finance today, and we'll see if we can match you with one of our trusted lenders. All finance is subject to status, and lender terms and conditions apply.

Our team is available to answer any questions you might have about the application process. For more loan-specific information, your lender should have the answers you need.

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Apply now Rates from 9.9% APR. Representative APR 24.9%. Autodosh is a credit broker, not a lender.