LATEST READ   What is PCP car finance?   Read Guide

PCP car finance - personal contract purchase

Search for a great deal on your next set of wheels. Get your free quote today!

🏦  View car loans across dozens of lenders
🔒  Check for quotes & protect your credit score*
⏰  Apply for car finance in minutes

Find PCP car finance quotes in an instant

✅ Check your eligibility

Answer quick questions to find out if you can apply. Ready to compare car loans suiting you.

⚖️ Compare car loans

View and compare various loan results from a selection of great lenders.

💸 Apply online today

Once you’ve chosen a car finance loan, proceed with your application through trusted lenders.

What is PCP car finance and how does it work?

Personal Contract Purchase (PCP) car finance is a type of finance agreement that enables drivers to get behind the wheel of a new or used car, often with lower monthly payments. This makes it an attractive option for those looking to upgrade their car but are on a tighter budget. 

At the end of a PCP contract, customers have three options; return the vehicle and walk away, part-exchange for another vehicle, or make another lump sum (balloon) payment to own the car outright.

Securing PCP car finance

Looking for PCP car finance quotes and deals? That’s super simple to do with Car Finance Saver. We’ve partnered with Monevo who can provide you with access to dozens of lenders with tailored and competitive finance deals. You’ll be in your new car in no time.

To get on the roads with PCP car finance, complete the short application form, answering a few questions about your current situation. This’ll help pair you up with lenders. You can then compare the quotes provided and go ahead with whatever one you feel is right. Trusted lenders will look after you and complete your final application.

Buy your car with confidence

Get car finance quotes in an instant, without the faff. Your new set of wheels is just around the corner.

Frequently asked questions

PCP stands for Personal Contract Purchase. It is one of the most popular ways of financing a car due to having lower monthly payments.

Most individuals over the age of 18 are eligible to purchase a car on a personal contract purchase (PCP) agreement. Applicants must have a good credit rating and must demonstrate that they can afford the monthly payments, however some lenders can offer deals for those in different situations.

It’s important to bear in mind that a PCP is only suitable for short-term use of the vehicle. At the end of the contract period, you will need to make an additional payment, called a balloon payment, or arrange an alternative finance package if you wish to keep the car. Those who cannot meet this obligation may instead opt to return their car to the dealer with no further cost or liability.

At the end of the PCP term, you will have the option to either make a final balloon payment and take ownership of the car or return it to the lender.

A balloon payment is a lump sum paid at the end of a loan term in order to settle the remaining balance. This type of payment structure is often used when borrowers are unable to commit to a regular repayment schedule due to limited income or other financial constraints. It can also be an attractive option for borrowers who want to invest their money elsewhere, as it reduces their regular repayments and enables them to pay off a larger amount at once.

A PCP (Personal Contract Purchase) contract and a lease are two different types of financing arrangements. Although similar, there are some distinct differences between the two.

A PCP contract is an agreement between the customer and a finance company. An initial deposit is usually paid towards the purchase price of the item, followed by monthly payments over the term of the agreement. At the end of the term, customers have three options: return the car to the finance company; part exchange it for another vehicle; or pay off any remaining balance outstanding on their loan in order to own it outright. 

With a lease agreement, however, customers can make monthly payments on their car but they do not own it at any point during or after their contract. Ownership remains with the finance company throughout this period. This means that customers are essentially renting the vehicle from them until they decide to return it at, at which point their contract will terminate.

When it comes to financing a new car, most people have to make the important decision of whether to opt for PCP (Personal Contract Purchase) or HP (Hire Purchase). Deciding between the two options can be a difficult task, as each provides different advantages and drawbacks. 

PCP is often seen as the more flexible option, due to its lower upfront cost and lower monthly payments. Those who don’t drive often or don’t want to commit to something long-term often choose PCP. There is an end-of-term balloon payment which must be paid if you want to keep the car at the end of the contract period.

HP car finance is less flexible than PCP but offers more security. You will own your car outright once all of your payments have been made. Any future value gained by owning your car completely may outweigh any additional costs incurred from opting for this type of finance.At the end of the day, choosing between PCP or HP finance will be a personal decision, based on your requirements.

Related PCP car finance guides

Is PCP car finance the right option for me?

Whether or not a PCP car finance option is right for you really depends on your individual circumstances and needs. There are a few things to consider before making the decision, such as how long you need the car for, and what your financial situation is.

The great thing about PCP car finance is that it’s more flexible than other car financing options. It gives you the ability to hand back the car after the agreed period of time, so you don’t have to commit to anything further down the line. If you’re trying to save some money and like the sound of this, you’ll also be pleased to know they PCP offers lower monthly payments to better suit your budget.

Looking for car finance quotes?

View cheap finance lenders that are ready and waiting to get you on the roads. Explore your options today.

Advantages & disadvantages of PCP car finance

Advantages of PCP car finance

PCP is great for those looking to save some money. As you won’t own the vehicle at the end of the agreement, PCP deals often result in lower monthly payments and sometimes lower interest rates. For this reason, PCP terms are seen as a more flexible option.

Disadvantages of PCP car finance

You won’t own the car when your contract finishes, so you’ll have to decide whether – you hand the car back to the finance company, keep it and pay a large lump sum, or upgrade to a newer model and start another agreement.

Search all types of car finance