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What is Personal contract Purchase (PCP)

Its a form of Hire purchase that adds a Guaranteed future value (GFV) on to the end of the contract to decrease the monthly payments over the term of the contract.

PCP is broken down in to 3 sections:

  • Deposit 
  • Monthly Payments 
  • GFV

A finance company will set a maximum GFV which can be decreased if a customer wishes to do so but never increased. If a customer is to choose the maximum GFV then the amount they pay over the contract regardless of how much of a deposit they put down will not change. This gives a customer flexibility in adjusting the contract to suit their requirements ie a larger deposit to have lower monthly payments.

The key differences over Hire purchase which makes it better for some people but not for others is that you get the option to own the vehicle at the end of the contract whilst paying a lower monthly payment. It’s essentially a contract where instead of paying monthly instalments for the entire value of the car, you pay for the calculated depreciation value for however long you take out the contract, which can be between 2 and 4 years. It has become popular thanks to its flexibility, as once you have chosen a car you can decide how much of a deposit you want to pay and how long you want the contract to last. You then tell them how many miles you do a year and we will then give you the monthly price.

PCP is useful for both the customers and dealerships because at the end of the contract you can come back and renew in to a new car is you do not wish to purchase.

When it comes to the end of the contract the customer has the option to Retain, Return or Renew.

Retaining the vehicle means purchasing

Return means you can contact the finance company and arrange collection of the car. This is beneficial if the car has depreciated more than the guaranteed future value as you will not need to pay the negative equity to get out of the contract. 

Renew means that you can go to any dealership and sell your car to them in order to clear the finance and then set up a new contract for your next car.

The benefit to renewing with Lets Talk Finance is that we cover both new and used and any make and model of vehicle so our customers are not restricted in the choice they can have for their next car.

Generally PCP is more expensive that Personal contract hire (PCH). This is because you do not get the option to own the vehicle at the end of a PCH agreement so you are just paying the calculated cost of depreciation of the vehicle.

What Are The Main Benefits of Personal Contract Purchase (PCP)?

  • Low initial payment 
  • Fixed monthly payments 
  • Two, Three or four year contracts available 
  • Optional service package 
  • Option to purchase, Part exchange or return the vehicle at end of contract 
  • Road Fund Licence, Manufacturers warranty and in nearly all cases, comprehensive breakdown cover is included 
  • Free delivery and collection to UK mainland

Finance packages with Lets Talk Finance

Here at lets talk finance we offer all finance packages to give our business and personal customers flexibility in choosing their next vehicle. You can call the office or request a call back to discuss your options in details.

For more information on any of our cars or services, please get in contact with us by emailing sales@letstalkfinance.co.uk or calling 01625 568 612.

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Lets Talk Finance are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 788369

Registered in England & Wales with company number : 10690121 | Data Protection No : ZA445902 | VAT No : 310 2674 45

Registered Office : Clover Cottage Greendale Lane, Mottram St. Andrew, Macclesfield, United Kingdom, SK10 4AY

Disclaimer: All vehicle images and descriptions are for illustration and reference purposes only, all vehicle leases are subject to credit approval and subject to change at any time. E&OE.

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