A variation of a Hire Purchase agreement, a PCP is a finance plan where you pay a deposit followed by fixed monthly instalments over an agreed period, followed by an optional final payment. It allows you to spread the cost of the car over a period of time and could be the right finance option for you if you like to change your car regularly.
The future value of the car is calculated at the start of the agreement and this value is then deferred until the end of the agreed period. Usually referred to as the Guaranteed Minimum Future Value (GMFV) it is calculated using a number of factors. These include how old the car will be at the end of the agreement and how many miles it is expected to have covered.
There is in-built flexibility with a PCP plan. At the end of the agreed period you can decide whether you would like to own the car outright, (which you can do by paying the deferred value (GMFV)), or return the car to the lender and enter into a new car finance agreement. At this stage for instance, you may wish to change car make and model.
It should be possible to fully or partially settle a PCP agreement before the planned end-date, but the specifics of this should be verified with your lender as each finance company may have different operating procedures.
Perfect for those who know they will be looking to move on to another car once the agreement period is over.
Pay an initial agreed deposit and pay off the remaining value of the vehicle in monthly instalments.
Available from or /month (Rep)