Personal Contract Purchase - PCP

As with business contract purchase, you have the option to either return the vehicle at the end of the term, or to pay the balloon payment and retain ownership of the vehicle. If the vehicle is returned then condition and excess mileage charges may apply.

Personal Contract Purchase can be provided over any length of time from 18 months up to 5 years.  It allows you the flexibility of enjoying a new car on a regular basis.

One of the biggest benefits of PCP over PCH is that it might be less penal if the agreement needs to be terminated early. One of the major downsides is that it may not be quite as competitively priced.

APR’s should be quoted, and typically a figure of around 12-15% is generally competitive, but a higher or lower APR doesn’t mean bad value and unfortunately the way in which an APR is calculated can vary which will also affect the rate displayed on a quote. The reality is that if you don’t ever intend to pay the balloon rental then the only really meaningful thing is the monthly rental and what’s included for the money.

Comparing Contract Purchase Quotes

When you are comparing contract purchase quotes from different sources you should ensure that the quotes are all based on the same terms see ‘Watch Out’ for more details.  You should also make sure that the balloon payment is guaranteed, and that you understand what your obligations are to ensure it remains so. Road Fund Licence/Road Tax will be included for the first year of the contract however it may be your responsibility after the first year.  This should be clearly explained on the quote and will have the effect of reducing the monthly payments.