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Car Finance PCP (Personal Contract Purchase)

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What is PCP?

Personal Contract Purchase (PCP) is the most popular finance option. A Personal Contract Purchase finance option is similar to the Hire Purchase finance option. Although instead of paying off the whole value of the car in monthly instalments, you only pay for the depreciation value. Essentially, your regular payments are based on the balance plus interest on the optional final payment if you opt to own the car at the end of the agreement. You also have the option to renew your vehicle more often for a more current model. You still choose the deposit along with the length of the agreement and an estimated average annual mileage.

At Sandicliffe our Personal Contract Purchase deals are available on a variety of models across our range. PCP is only available with privately owned vehicles and not for commercial vehicles.

How does PCP work?

With a PCP plan you still pay a deposit as well as a monthly instalment but you are paying a much smaller amount. This is due to the final payment or ‘balloon’ payment at the end of the contract. You choose your deposit, the length of your agreement and your estimated annual mileage. Your fixed monthly payments are based on the balance and interest of the optional final payment. At the end of the agreement you may return your vehicle, renew your contract or keep the vehicle by paying the optional final payment.

Interest rates are often low when you choose a PCP vehicle, however there are also mileage limits and a wear and tear policy. If these aren’t kept to, you could face a penalty

At Sandicliffe our Personal Contract Purchase deals are available on a variety of models across our range.

What happens at the end of the contract?

When you reach the end of your agreement, Sandicliffe will contact you to remind you about paying the outstanding balance of your contract. You will also have three options as to what to do with your PCP vehicle;

Return the Car

The value of the car will be equal to the balance outstanding, so you may simply opt to return your vehicle. The vehicle must have not exceeded its agreed mileage usage, there must be no major repairs needed and it must have been serviced on time. If you choose this option then your PCP vehicle has served more like a finance lease.

Retain the Car

You can pay the remaining balance in order to keep the car. If you decide to do this then your PCP finance plan has effectively worked as a Hire Purchase.

Re-new the Agreement

You may re-new the agreement to benefit from a newer model. Alternatively you may also part-exchange your car for another model. Contact your local Sandicliffe dealer for more details.

The team at our Lougborough dealership ready to advise on PCP

Benefits of PCP Finance

The full flexibility of a Personal Contract Purchase is why it is one of the most popular finance options. Here is a rundown of some of the benefits from choosing PCP

  • Smaller payment methods compared against other finance options due to the larger final sum or ‘balloon’ payment to be paid at the end of the agreement
  • You have three options towards the end of the agreement. You are not forced to pay the ‘balloon’ option if you opt to own the car, return the car or part-exchange the car.
  • Fixed repayments to assist you with your cash-flow and budgeting.
  • Access to upmarket vehicles, enabling you to be able to afford to drive a car that you may not be able to afford to buy.
  • Option to re-new your vehicle to a more recent model more regularly.
  • The GMFV means that you are covered if the value of your car drops and your equity can also be used as a deposit for another PCP.

Guaranteed Minimum Future Value (GMFV)

The Guaranteed Minimum Future Vale for the car is the minimum value of the car at the end of the agreement. This covers you if the value of the car suddenly drops whilst you are in the midst of your agreement if the car happens to be worth more. The equity can also be used as a deposit if you are to opt for another PCP finance plan.

Other types of Car Finance Options

If you think that PCP is not the best option for you, take a look at the other available finance options that we have to offer at Sandicliffe! Talk to one of our friendly and professional members of the sales team if you are unsure on the benefits of each finance package. We have over sixty years’ experience as the East Midlands main car dealership. It’s our experience that helps us to ensure that you are in the know about your vehicle and your finance option!

If you would like to speak to one of our professional members of the Sandicliffe team to find out more about Personal Contract Hire. Then come and pay us a visit at your local Sandicliffe dealer.

Personal Finance Leasing

Personal Finance Leasing allows you to choose the hire period that’s right for you. You will pay via a fixed monthly rental. At the end of the agreement you are responsible for either selling the vehicle or agreeing a part exchange price with your local Sandicliffe dealer. Alternatively, you may extend the agreement into a secondary period.

You can find out more information on our car leasing page.

View Car Leasing

Personal Contract Hire

Personal Contract Hire is a fixed term operating lease finance option. With Personal Contract Hire you pay a fixed monthly amount for the duration of your agreement. Personal Contract Hire is the most common type of ‘car leasing’ for both private vehicles and business hire vehicles. The car is in your possession throughout the lease period but you are essentially hiring the vehicle for a fixed amount.

You can find out more information on our PCP page.

View PCP

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