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20th Oct 2018 - Contract hire funding solutions for personal and business users with vehicles supplied direct from local dealers with no admin fees
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Personal Contract Purchase

Personal Contract Purchase (PCP) is a type of hire purchase agreement for personal customers looking to fund a new or used vehicle in a manageable way

The monthly payments are not subject to VAT; however, if you do take out the optional service package then you will have to pay VAT on the service costs.


  • Low initial payment
  • Fixed monthly payments
  • You may be able to refinance the balloon payment
  • No depreciation concerns if you wish to walk away at the end
  • Maintenance and servicing can be included
  • Optional final 'balloon' payment, fixed at the outset, to purchase the vehicle at the end of the agreement
  • Can be used to finance new or used vehicles
  • Lower monthly costs than an equivalent 'standard' hire purchase agreement


  • You must have fully comprehensive vehicle insurance
  • You may incur costs if the car is not kept in reasonsble condition of repair and if the annual mileage allowance is exceeded
  • Higher overall interest costs than an equivalent 'standard' hire purchase agreement
  • Optional final payment to buy the car may be more than it's worth at that point.

More Information on Personal Contract Purchase:

PCP is ideal for any individual who would like options at the end of their finance agreement. PCP customers make an initial payment when they first take out the contract, then pay fixed monthly payments and finally may make an Optional Final Payment (OFP) at the end at the end of the contract if they want to buy the vehicle.

You can trade in or sell your vehicle at a dealership and take another vehicle from them. If the trade in value is larger than the OFP you will be able to use the difference towards a deposit on a new vehicle. Or, you can simply return the vehicle to the funder, as long as you have not exceeded the mileage and the vehicle is in an appropriate condition for its age there will be no charge. Finally, you can keep the vehicle either by paying the OFP in full or you will find that most companies offer the opportunity to re-finance the OFP.

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