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Personal Contract Purchase

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  • A more flexible way to fund your new wheels

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Compare car finance deals from across the market

Our partner Motiv works with a wide range of providers, including the big car finance brands, to help you borrow the money you need

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Why compare personal contract purchase plans with MoneySuperMarket?

  • It’s quick and easy

    Simply tell us a little about yourself and the car you want to buy, and you’ll see all the deals you’re eligible for in one place – along with the monthly repayments and your chances of being accepted.

  • It won’t harm your credit score

    We’ll ask a few quick questions about your finances to only show you deals that you’re likely to be accepted for 

  • Get a great deal today

    We’ve partnered with Motiv to bring you great car finance deals. Once you’ve found one that suits your needs we’ll put you straight through to the lender.

What is PCP car finance?

A personal contract purchase (PCP) agreement is a way of financing a new car without having to buy it outright. You usually pay a deposit and then an agreed number of monthly payments which cover the vehicle’s depreciation.

At the end of the contract you can pay one final ‘balloon’ payment to own the car or return it to the dealer. 

car keys

How does a personal contract purchase deal work?

With PCP car finance, you can get a great set of wheels right now, without having to pay the full cost up front. Here’s how it works:

  • Select deal

    With plenty of car finance options available from across the market all you need to do is find the one  that best suits you. We’ll send you through to the lender to get your deal started

  • Make an initial deposit

    With PCP, you’ll usually need to pay some of the car’s asking price up front. There might be a minimum deposit of 10%, and a bigger deposit might even mean better rates and deals 

  • Make monthly repayments

    You’ll pay back the finance in monthly payments. PCP deals usually last for three to five years – and every payment brings you  closer to owning your new car outright

  • Final payment

    Once your deal is over, you have a choice. You can hand back the keys and walk away, trade it in for a new car on a new PCP, or make one large ‘balloon’ payment to keep the car

How much will my PCP deal cost me?

PCP can be a more affordable way to finance a car – that’s why more than half of new vehicles financed through a dealership use PCP deals. But the final cost will depend on a range of factors:

  • Your deposit: The more you can pay upfront, the less you’ll have to borrow and pay interest on

  • The loan term: Longer finance deals mean lower monthly payments, but you’ll pay more interest overall

  • The interest rate: The lower your interest rate (APR), the less interest you’ll have to pay. You can get access to better interest rates by boosting your credit score

  • What you do at the end: To keep your car at the end of a PCP, you’ll need to make a final large ‘balloon’ payment – or you can simply hand back the keys and walk away

Use our car finance calculator to see how much your new car will cost.

36-Month Example

Car Price

£15,000

Deposit

£1,000

Representative APR

7.9%

Option to purchase fee

£10

GMFV / Final payment*

£6,750

Total cost of credit

£2,438.62

Total payable

£17,438.62

Source: Motiv Finance. Representative 7.9% APR.

* GMFV is guaranteed minimum future value. This is the value of the car at the point you're due to make your final payment.

What are the pros and cons of PCP finance?

  • Tick

    Advantages

    • Lower monthly payments compared to HP or a personal loan

    • A new or more expensive car model could fall within your budget

    • Flexibility to buy the car outright or hand it back at the end

  • Cross

    Disadvantages

    • You won’t own the car unless you make the large balloon payment

    • You can usually only have a PCP plan for cars worth £10,000 or more

    • Finance is secured on the car - it could be repossessed if you miss repayments

How do I choose the best PCP deal for me?

  • Tick

    Search for the best deal

    The best option is unlikely to be the first deal you come across. By shopping around, you can look for the most affordable PCP plan available

  • Tick

    Choose the car you want

    The fun bit is selecting the right make and model for you. Make sure it is practical and meets your needsThe fun bit is selecting the right make and model for you. Make sure it is practical and meets your needs

  • Tick

    Make sure you can afford it

    The deal can be structured in different ways. For example, a larger deposit will reduce your monthly payments

  • Tick

    Check the terms and conditions

    Make sure you’re happy with any mileage restrictions or conditions in place on wear and tear

Alternatives to Personal Contract Purchase

If you decide PCP isn’t right for you, there are plenty of other ways to get yourself in a new car. Consider some of these:

  • Car loan

    1. Borrow a sum of cash for your new car from a lender of your choice

    2. Pay it back in monthly instalments, including interest on the loan

    3. The car is completely yours from the day you sign up

  • Hire Purchase

    1. Make a deposit – usually 10% - and then monthly payments.

    2. Once the deal is finished, the car is yours to keep

    3. No final ‘balloon’ payment – but it might cost more month to month

  • Leasing – Personal Contract Hire

    1. Pay a small deposit, then make fixed monthly payments to lease the vehicle.

    2. Servicing and maintenance is usually included, but you need to stick to an agreed mileage.

    3. At the end of the lease, hand the car back – there’s no option to buy

Compare PCP deals with our partner Motiv

It’s easy to find the right car finance option for you when you compare with us.

  • Tell us about yourself

    Simply answer a few quick questions about yourself so we can see what you’re eligible for – it won’t affect your credit score

  • Your ideal car

    If you’ve already picked a car, you can look up its registration, or just tell us how much you’d like to spend

  • Choose your deal

    We compare some of the UK’s leading car finance brands to help bring you the right deal for your needs

No, PCP is a popular way of financing both new and used cars.

Yes, you can usually settle PCP deals early. If you wish to do this you should contact the finance company (ideally in writing) and ask them to tell you the total amount you must pay to clear the loan in full. This amount is called an ‘early settlement figure’ and once you have this to hand you’ll have 28 days from when they received your request to pay the amount off in full. 

Assuming your finance deal is a regulated agreement the lender is required by law to include a rebate for a portion of the interest charges that are yet to be incurred (the exact portion depending on how close to the end of the agreement you are when you choose to settle the balance).

Sometimes a PCP deal may not be a regulated agreement, for example if you’ve bought a very expensive car or a classic car. In this case you may not automatically be given the same flexibility for early settlement. You should ensure you understand this before signing up to such an agreement.

If you wish to make any modifications to a car that is currently financed with PCP then you’ll usually need to obtain permission from the finance company. This is because although you may be the registered keeper of the car, the finance company will be the owner until the finance is paid off in full.

If the amount you have borrowed is under £25,000, you can usually cancel within 14 days of the agreement being signed. This period is often called a "cooling off period" and the finance company will provide you with details of the specific process you would need to follow. If you’ve borrowed £25,000 or more, speak to your finance company to understand your options.

If the finance cancellation request is accepted it will need to be repaid in full. This will involve the lender reversing the payment with the car dealership and arranging for the car to be returned to them. However, you should not assume the dealership will automatically be willing to take the car back. If you bought the car on the premises of a car dealership and signed a ‘vehicle order form’ at the location, you may be legally required to pay for the vehicle in full which will require you to have funds available or alternative finance agreed. Also, if you paid an initial cash deposit, this may not be refundable – even if the dealer does take the car back.

Beyond 14 days, your options to cancel the agreement are likely to be more restricted. If your agreement is a ‘regulated agreement’ you’ll usually have a right under UK Law to voluntarily terminate your agreement once you have paid more than 50% of the total amount payable. Check your agreement or speak to your finance company to find out your options.

In nearly all cases, you will need to insure the car you buy with a PCP agreement yourself - just as if you had paid for that car in cash. Some dealerships may offer insurance as part of their overall deal, but you should never assume this is the case.

The finance company will usually require you to take out a “fully comprehensive” insurance policy. If the car is damaged or written off, this provides the finance company assurance that the loan can be repaid. 

A key difference between PCP and HP is what happens once you reach the end of the contract period.

With HP you own the car, but with PCP you have the option to make one final ‘balloon’ payment to purchase the vehicle or you can hand it back to the dealership. Our guide on the difference between PCP and HP explains more.

The mileage limit on PCP deals varies from deal to deal. It's often between 6,000 and 30,000 miles per year, and if you go over the limit your finance provider will charge you extra per mile.

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So how do we make our money? In a nutshell, when you use us to buy a product, we get a reward from the company you’re buying from.

But you might have other questions. Do we provide access to all the companies operating in a given market? Do we have commercial relationships or ownership ties that might make us feature one company above another?

We commit to providing you with clear and informative answers on all points such as this, so we have gathered the relevant information on this page.