Personal Contract Purchase Car Finance

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Rates from 7.9% APR. Representative APR 11.9%

Representative example: borrowing £7,000 over 4 years with a representative APR of 11.9%, an annual interest rate of 11.9% (Fixed) and a deposit of £0.00 the amount payable would be £183.99 per month, with a total cost of credit of £1,831.68 and a total amount payable of £8,831.68.

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Vehicle Price:

£ 7000

Initial Payment (Deposit):

£ 0

To Pay Over:

48 Months

Assuming your credit rating is:

Best Available Rate:


Initial Borrowing:


Total Cost Of Credit:


Total Amount Repayable:


Optional Final Payment:


48 Monthly Payments of


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No impact to your credit score

Rates from 7.9% APR: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £7,000 over 4 years with a representative APR of 11.9%, an annual interest rate of 11.9% (Fixed) and a deposit of £0.00 the amount payable would be £183.99 per month, with a total cost of credit of £1,831.68 and a total amount payable of £8,831.68.

What is Personal Contract Purchase

Personal Contract Purchase (PCP) finance can be a convenient way to finance a vehicle purchase, as they typically offer lower monthly payments than traditional auto loans.

PCP is an agreement that allows you to place a deposit and make a fixed monthly payment towards the cost of a car. At the end of the agreement you can either hand the car back, use it as a deposit for a new car or pay the optional final payment, which is the guaranteed minimum future value of car, and then own the car outright.

Step-by-Step Buying Guide

How does Personal Contract Purchase work?

Here’s a quick example:

Let’s say you want to buy a car worth £40,000 and to finance it over 48 months with a total of 10,000 miles per annum. You wish to pay 10% as a deposit - which is £4,000. Your lender estimates the guaranteed minimum final value (GMFV) of the car after 48 months to be £25,000. Your lender then gives you a loan of £36,000 to pay the dealer for the car and asks you to pay them back the difference between the loan and the GMFV which is £11,000 plus interest.

You sign a 48-month contract at 8.9% APR. So, your monthly payments will be £459.

With the interest, the total amount you end up paying back will be £22,000. At the end of the agreement, you choose to pay the £25,000 GMFV and own the car. Your total outlay including the deposit is £51,000.

Comparison of Personal Contract Purchase with other options

Finance Features: Hire Purchase (HP) Personal Contract Purchase (PCP) Personal Loan
Requires initial deposit Optional Optional
Car is yours at the end of the agreement
Fixed monthly payments
Optional balloon (final) payment
Avoid excess mileage charge
Secured against an asset (e.g. a car)
Support with vehicle issues

Pros & Cons of Personal Contract Purchase Finance

You can purchase a new car without the high cost.

You pay a small affordable amount monthly instead of paying a lot of money all at once.

There are many options for what to do with the car at the end.

You can add optional service and maintenance packages.

The future value of the car at the end of the agreement is guaranteed.

It can be a cost effective way of countering depreciation costs.

You don’t own the car until you pay the optional final payment.

Interest rates can be higher on older cars.

Mileage allowances are fixed yearly, and fees are incurred if you go over this.

The future value of the car also depends on wear and tear and maintenance. You may have to pay for any repairs.

Frequently Asked Questions

How old can a car be for PCP?

PCP are typically given for new cars, or those up to 10 years old. Because of how fast a car will depreciate, PCP is not usually available for older cars beyond 4 years old and lenders will not finance these. The best APR deals are given to newer cars.

Can I end my PCP agreement early?

Yes, but there may be additional fees incurred if you do so and it may affect your credit score, which can impact your ability to take out future loans. If you wish to end your deal early, speak to your lender who may be able to offer you a settlement figure.

Can I refinance my PCP car?

If you’re looking for a better monthly deal on your PCP car, you can shop around and ask different providers for new quotes. Your existing lender will give you a settlement figure that will allow your new lender to take ownership of your car and refinance it for you. Your existing lender may charge you for this.

Should I take out Gap insurance after finalising my PCP deal?

Gap insurance offers security in knowing you’re protected in the event of a car crash or theft by covering the “gap” between your insurance pay-out and either the purchase price of the car, outstanding PCP amount or exact brand new replacement of the same car. This is not compulsory.

What additional fees are there?

You will be responsible for vehicle tax, insurance, maintenance. If you go over your mileage allowance, there is a cost per mile. There will also be administrative costs involved in the process.

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