Personal Contract Purchase

Personal Contract Purchase (PCP) is a method of funding where the customer leases a vehicle for a set period at a fixed charge. There are options available at the end of the contract where the customer can pay to buy the vehicle with a balloon payment or return the vehicle with nothing to pay. The monthly charge is determined by the initial cost of the vehicle, the mileage, the period of the agreement and the estimated value of the vehicle at the end of the contract.

The benefits to this option are lower monthly payments, low deposits (usually from 10%), flexible terms available from 12 -36 months and a choice of options at the end.

Potential drawbacks are that mileage and condition affects costs, total amount paid may be more than HP and the fact that you have to settle the deferred amount at the end if you want to keep the car.