A personal contract purchase also known as a PCP plan is one of the many finance options that we offer, this option is popular because you only pay for part of the vehicle with a small lump sum to pay at the end of the policy this needs paying to keep the car (this is why the repayments are so cheap compared to a hire purchase agreement), otherwise you can swap to a newer/better car, this method is quite similar to a lease as you get a new car and keep on paying the monthly re-payments.
A PCP plan will typically consist of three parts
Firstly, a deposit, the deposit part of the plan is completely flexible as we can do anything from a nil deposit to however much you can afford to put down, this deposit effects your monthly re-payments as the bigger the deposit, the smaller the amount of money that will have interest on it. So basically, the bigger the deposit, the smaller the monthly repayments and interest on these re-payments.
Secondly the monthly re-payments. As for the monthly re-payments part of it, as was said before is directly affected by the deposit, and the amount that is needed after the deposit (the amount financed) will have interest (this interest is affected by your personal credit score) and on a PCP plan is typically 48 months.
Once all the payments have been made the final step is the small lump sum mentioned before, as well as paying this amount of money straight up, the sum can be re-financed or a new car can be arranged and the repayments will be started again.
To see if Personal Contract Purchase is the perfect option for you, simply fill out a quick PCP application.
The Benefits & Disadvantages of PCP:
Firstly, the affordability aspect. Compared to the hire purchase agreements a PCP plan is a lot cheaper as you only pay for part of the car with a final payment to be made at the end of the term.
Most people tend to change cars around every 3/4 years so with the PCP plan you can change cars easily and effectively.
The only downsides regarding the PCP plan is the balloon payment which can be tricky to negotiate mainly because some people can’t fork out possibly a grand on demand, and the fact that cars on PCP plans cannon be over 4 years old. The way around the balloon payment is to possibly re-finance the balloon or swap to a different car. In regards to the 4 year old situation there is nothing that can be done apart from switching to a hire purchase agreement.
Auto Finance Alternatives to Personal Contract Purchase
To summarise PCP is good for low monthly payments as long as you have some spare cash sat in your bank, and hire purchase is good if you want possibly an older car or don’t want to muck about with the lump sum at the end.
The support team at GetCarFinanceHere can broker a wide range of auto finance options for you to choose from even if your credit rating is poor. In need of a great deal fast? Check out our used car deals.
Contact GetCarFinanceHere for Guaranteed PCP Motor Finance
If you would like to be guaranteed a viable deal that gets you behind the wheel while catering to your budget, find out how GetCarFinanceHere will broker your guaranteed car finance.
Of course, speaking to a member of the team will help you to reach an informed decision quickly if you need your dream car sooner! Our auto finance brokers focus on sourcing the best deal for you, so give us a call on 01282 544532.