Personal Contract Purchase (PCP)
Personal Contract Purchase (PCP) is another kind of Hire Purchase that works in much the same way as Lease Purchase. Terms usually last between 18 and 42 months. Choosing a PCP with Westhill Cars Ltd to finance your next car is an effective way to keep monthly payments low and is frequently chosen by business users who are not part of a company car scheme.
A PCP is very flexible, with your deposit amount, monthly payment, predicted annual mileage and final ‘balloon’ payment all being adjustable. The balloon payment is based on the Guaranteed Minimum Future Value of your vehicle, which is based on the average industry value at the end of your agreement.
A clear advantage that comes with a PCP is that, as monthly amounts are significantly lower than with other types of finance, you can select a higher specification car without incurring higher costs. Equally you might decide to go for a shorter term.
With a PCP the final payment is often adjusted downwards to take the depreciation of your vehicle into account. This is done to make sure you have positive equity at the end of the agreement to purchase your next car. In addition, the payment is guaranteed by the finance company, which is an advantage unique to PCPs. If the car depreciates more quickly than you were expecting, you can return it without incurring any extra charges.
Flexibility and choice are PCP strengths, and it is possible to pay off a PCP agreement early if you wish. At the end of the term, you can keep the vehicle or use it in part-exchange for another model. Shorter PCP terms give you the chance to try out new cars more frequently.
To explore your Personal Contract Purchase options with Westhill Cars Ltd, simply contact us today.
Westhill Cars Ltd
- 01224 744411
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