Personal Contract Purchase (PCP) is a popular loan option whereby you borrow an agreed sum of money, which you’re required to repay over the length of a contract (normally between 24-48 months). Once you reach the end of your PCP contract you have the choice of 3 settlement options:
a) Return the car to the lender
b) Keep the car and pay a balloon payment
c) Part exchange your car towards a new vehicle on finance
- A choice of settlement options
- Newer vehicles available within your budget
- Lower monthly repayments
- Ideal for people who upgrade their car regularly
You take out a 4 year PCP agreement on Audi A4 valued at £9,500. You have a deposit of £100, so your required loan amount is £9,400.
With an APR of 8.5% your total monthly repayments are calculated at £149.05.
Taking into account the depreciation of the vehicle based on an annual mileage limit of 10,000 miles, the lender calculates the residual value of the vehicle to be £4,625.
If you want to own the vehicle at the end of your agreement, you must pay the residual value of £4,625, this is referred to as the balloon payment.
Alternatively, you can use it as a part-exchange towards a new vehicle, or simply return it to the lender with nothing owing.
Find out how much you can borrow using our car finance calculator.
Representative example: borrowing £7,500 over 48 months with a representative APR of 18.9%, an annual interest rate of 18.9% (Fixed) and a deposit of £0.00, the amount payable would be £223.86 per calendar month, with a total cost of credit of £3,245.06 and a total amount payable of £10,745.06.
Want To Know More?
For more loan options head over to our Hire Purchase, Lease Purchase or Personal Contract Hire pages.
Check My Eligibilityor call us on 0333 6000 290
Our Customers Love Us!
Excellent customer service. Got me a great deal and the car I was looking for! Would highly recommend to anyone!
Kyle, Kidwelly
This is the second time I’ve used Creditplus to buy a car, and to be honest, I wouldn’t really do it any other way.
Sarah, Midlothian
Clear and helpful throughout the process. Really pleased and looking forward to driving my new car.
Sian, Liverpool
Personal Contract Purchase (PCP)
At a Glance
Personal Contract Purchase (PCP) is a popular loan option whereby you borrow an agreed sum of money, which you’re required to repay over the length of a contract (normally between 24-48 months). Once you reach the end of your PCP contract you have the choice of 3 settlement options:
a) Return the car to the lender
b) Keep the car and pay a balloon payment
c) Part exchange your car towards a new vehicle on finance
Benefits of a PCP Agreement
- A choice of settlement options
- Newer vehicles available within your budget
- Lower monthly repayments
- Ideal for people who upgrade their car regularly
Example
You take out a 4 year PCP agreement on Audi A4 valued at £9,500. You have a deposit of £100, so your required loan amount is £9,400.
With an APR of 8.5% your total monthly repayments are calculated at £149.05.
Taking into account the depreciation of the vehicle based on an annual mileage limit of 10,000 miles, the lender calculates the residual value of the vehicle to be £4,625.
If you want to own the vehicle at the end of your agreement, you must pay the residual value of £4,625, this is referred to as the balloon payment.
Alternatively, you can use it as a part-exchange towards a new vehicle, or simply return it to the lender with nothing owing.
Find out how much you can borrow using our car finance calculator.
Representative example: borrowing £7,500 over 48 months with a representative APR of 18.9%, an annual interest rate of 18.9% (Fixed) and a deposit of £0.00, the amount payable would be £223.86 per calendar month, with a total cost of credit of £3,245.06 and a total amount payable of £10,745.06.
Personal Contract Purchase FAQs
Want To Know More?
For more loan options head over to our Hire Purchase, Lease Purchase or Personal Contract Hire pages.
Check My EligibilityOur Customers Love Us!
Excellent customer service. Got me a great deal and the car I was looking for! Would highly recommend to anyone!