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What Is PCP?

Personal Contract Purchase commonly referred to as PCP may be a great option if you like to drive a new car every few years. Essentially PCP is like a loan to help you purchase your car, however unlike a Personal Loan you won't be paying off the full value of the car unless you decide to keep the vehicle. With the option of low monthly payments to fit your budget, PCP is a long-term finance option which is personalised to suit you. You have the option to own the car at the end of your agreed term by paying the Balloon Payment often known as the Guaranteed Minimum Future Value (GMFV) and the Option to Purchase fee, both of which are agreed at the beginning of your contract. Similar to Contract hire it is based on a fixed term and mileage.

Here are some positives for PCP and some things you should remember:


  • For a lower monthly repayment than your average personal loans, you get the opportunity to drive away with a new car.
  • PCP options are highly flexible, with several options at the end of your agreed term, you can even buy the car!
  • If purchasing the car is not the right option for you, you can simply had the car back.
  • No need to worry about the future trade-in or resale value of the car, as the lender will guarantee your car will be worth a minimum sum at the end of the deal.
  • You have the option to buy the car that you thought you may not have been able to afford.


  • You only own the car at the end of the agreement once you have paid the balloon payment and option to purchase fee. Just like other finance options you don't own the car during your agreement.
  • There is an agreed annual mileage allowance, which will be set at the beginning of your term. Make sure you are aware of your mileage as there is a charge if you go over!
  • Make sure you have the correct insurance when you agree to your PCP term, fully comprehensive vehicle insurance is a must!
  • You must keep your vehicle to a high-quality standard during your agreed term, or you could be charged for any damage to the vehicle (not including fair wear and tear).

So, is Personal Contract Purchase the right option for you? PCP is a fantastic way drive a new car every couple of years, it also gives you the opportunity of owning a car you may have not been able to afford outright. With often low monthly payments, PCP could be a great option for families or working professionals.

We don't currently advertise PCP deals on our site, however many of our dealers will be happy to offer you deals on a PCP contract, get in contact with one of our dealers through our Find A Dealer section.

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