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PCP - Personal Contract Purchase

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PCP - Personal Contract Purchase

PCPs (or Personal Contract Purchase) have become the most popular way of financing a new vehicle. Not only have they allowed millions of people to drive a much newer car than they might ever have expected but they are also flexible. At the end of the contract the person has the choice as to whether to keep the vehicle (by making a final payment) or to hand it back.

Get an overview of car finance and compare PCP to HP, the other main form of car finance.

How PCP Plans Works

How Personal Contract Plans work

A deposit is paid up front - the larger the deposit the lower the monthly payments that follow. At the end of the contract you can make a final balloon payment that allows you to take ownership of the vehicle. Or simply hand it back.

Summary of PCP Car Finance

  • Lower monthly payments than HP
  • Option to buy or return vehicle at contract's end
  • Final balloon payment needed to take ownership at end
  • Some restrictions on vehicles & mileage

PCP plans - available through our broker Zuto

  • New & used cars up to 5 years old
  • Can be used at dealer or private sale
  • Lower monthly payments than HP
  • Typically over 2-4 years
  • Deposit required
  • Balloon payment at the end
  • At the end of the monthly payment you can: 
    • make a final "balloon payment" & keep the car, or
    • part exchange the car against a newer vehicle, or
    • simply hand the car back
  • Better way to get into a newer car without a huge monthly payment
  • Better for people who like to change cars every few years

Please note: this information is for guidance only. You should clarify the terms of the loan with the lender before entering into an agreement.

Personal Contract Plans vs Hire Purchase

Video: PCP vs HP

PCP & HP - What's the difference?

What are these types of finance?

With HP you are working towards taking final ownership of the vehicle, but with PCP you can delay this decision until the very end.

Personal Contract Purchase (PCP)

  • you lease the car for a fixed period (typically 2-4 years) and make regular payments. The size of your deposit will affect the monthly repayments you make.
  • while leasing the car you don't own the vehicle
  • at the end of your lease contract you can:
    • hand the vehicle back and no more costs are involved
    • part exchange the car for a new PCP deal
    • purchase the vehicle outright with one final "balloon payment" which you know in advance.
  • Going over a set mileage will incur extra costs
  • Some contracts include vehicle maintenance

Hire Purchase (HP)

  • you're hiring the car while you make payments
  • you pay a deposit, make monthly payments and after you make the final payment you own the vehicle
  • avalailable to people with a broader spectrum of credit situations
  • a wider range of vehicles may be available

more information about HP

Video: PCP vs. HP


Representative Example

Loan Amount


Monthly Repayment


Loan Term

48 mnths

Total Repayment


Representative APR


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