Personal Contract Purchase cars (PCP) or car finance is just one of the many funding options on the market today. This agreement is often favoured by private individuals, with the option to eventually own the vehicle outright once the leasing period is over.
However, vehicle financing can be complicated territory if you’re not familiar with all the ins and outs…
If you’re wondering what Personal Contract Purchase (PCP) is, who it’s suited to, or how to get the best from a PCP deal, this page tells you everything you need to know.
*No deposit deals are usually only available to consumers with an excellent credit rating.
A Personal Contract Purchase involves paying for a vehicle via a series of equal monthly installments over an agreed term. At the end of your pcp contract, you have the option to hand it back, sell it on to another buyer, or purchase it and make the vehicle your own.
PCP car deals run anywhere between two and five years. You’re usually free to choose your own initial payment amount – opting for 1, 3, 6, or 9 monthly instalments in advance. Additionally if you have a specific cash amount in mind we can use this instead. No deposit deals are also available! These options give you a bit more wiggle room and flexibility, letting you fit your payment amount around your needs.
As well as the regularity of the repayments, there are a number of elements that influence the overall cost of your Personal Contract Purchase deal. These include:
– The type of vehicle you want (naturally, some models cost more than others)
– How long the contract lasts (longer deals often mean smaller payments, but a higher price overall)
– The annual mileage allowance (the distance you can travel in the vehicle may be capped in the agreement).
There may also be extra costs in place if the pcp agreement contains servicing and maintenance charges.
Personal Contract Purchase is a vehicle finance method often suited to private individuals who are looking for a low initial outlay and pre-agreed repayments. They are often the preferred method for those looking to finance a new vehicle with the option to take ownership of it in the future.
Personal Contract Purchase agreements are only available for those who are able to pass a credit check, pay an initial payment up front (although we do offer deals that do not require this), and are realistically able to meet all of the terms set out in the agreement (these vary considerably from pcp deal to pcp deal, so be sure to check them closely before signing).
There’s a lot to think about in terms of Personal Contract Purchase financing, so before you sign on the dotted line, consider these five essential tips to get the most out of your deal:
You will have the option to buy your vehicle as part of a Personal Contract Purchase agreement – but not immediately. Only when you’ve completed the repayment period will you be able to buy the vehicle for yourself.
If you are looking to purchase the vehicle upon conclusion of the agreement, you’ll need to have some money ready to make the balloon payment. This is a one-time fee made when the contract period ends.
Every vehicle on a Personal Contract Purchase or finance deal has a set annual mileage limit, similar to a Personal Contract Hire or leasing contract – and you’ll be subjected to charges if you overstep this pre-agreed threshold. Our advisers are available to help you work out how many miles you’re likely to cover before you put pen to paper.
All agreements will allow for a suitable amount of wear and tear during the leasing period, but you should check the definitions carefully. We can help with our handy de-hire guides. Ask for written examples of wear and tear beforehand, so you understand what constitutes actual damage and will incur a fee.
Often, you’ll need to have paid off at least half of the finance before you can end any Personal Contract Purchase deal. Make sure you read and understand the terms and conditions surrounding the termination and early cancellation of your agreement.
At the end of the contract, you have three options: return, exchange, or buy.
Once you’ve paid off the owed amount, you can give the vehicle back and the contract ends. Alternatively, if you fancy a different vehicle, you can exchange it on a new finance deal. If you choose to take ownership of the vehicle, you’ll make one final payment at the end of the agreement.
You can also include a maintenance package as part of the deal if you desire. This helps to spread the cost of general upkeep and avoid any unexpected de-hire charges.
With Yorkshire Fleet, you’ll be able to secure Personal Contract Purchase funding on almost any make and model of vehicle on the market, including BMW finance, Audi finance and Porsche finance.
As one of the most reputable brands in the vehicle finance and leasing world, we have worked with a wide variety of satisfied customers over the years – and we’d love to help you fund the vehicle of your dreams.
Browse some of our latest special offers right now, and take a look at some of the cars you can own through Personal Contract Purchase agreements. Once you’ve found a vehicle you love the look of, get in touch with Yorkshire Fleet and we’ll talk you through the next steps.
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