Personal Contract Purchase (PCP)

Personal Contract Purchase is an extremely popular method of funding a new car favoured by individuals and drivers opting out of a company car scheme. It offers low fixed monthly repayments with a choice of flexible options at the end of the contract. Your cars future value is calculated based on your annual mileage and offset to the end of the contract by means of a guaranteed future value, at the end of the contract you then decide to either:-

1. Buy the car by paying the agreed minimum future value

2. Part-exchange the vehicle for another

3 Pay the agreed minimum future value and sell the vehicle privately

4. Or, subject to mileage and condition, return the car with nothing more to pay

PCP is ideal for drivers opting out of a company car scheme. You use your company car allowance to fund your PCP monthly payments without having to pay company car tax.

Key Benefits of Personal Contract Purchase

Low risk - As minimum future value is guaranteed

Low deposit

Low fixed monthly payments

Choice - Buy the car, part-exchange it or just return it

A better car - lower payments could mean you can choose a better car

No company car tax if opting out of a company car scheme

VAT free - payments do not attract VAT.

Disadvantages of PCP

• Only available to personal users.

• Payments can typically be higher than contract hire on alike for like basis.

• If you return vehicle, excess mileage charges apply if you exceed the agreed contract mileage.