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Personal Contract Purchase

What is Personal Contract Purchase (PCP)?

Personal Contract Purchase (PCP) is a popular finance solution for customers as it has flexible end of term options.

Once you have chosen your ideal new or used vehicle, the annual mileage limit and agreement term will be decided to determine the Guaranteed Minimum Value (GMFV) in addition to the deposit amount and the fixed monthly amount.

How does it work?

Often customers will pay an initial deposit at the start of the agreement, which can be a cash deposit or you can part exchange your old vehicle, or both. Once the deposit is paid and the credit agreement is signed, you will pay fixed monthly payments for the duration of the contract (usually between 24-48 months).

At the end of the finance agreement there are three options:

  1. Give the car back and end the agreement (the lender may charge for any unreasonable damage to the car or for any mileage over the agreed annual mileage)
  2. Buy the car by paying the GMFV and any option to purchase fees set at the start of the agreement
  3. Part exchange/swap the car and take out a new agreement

Deposit and Mileage Limit

Some PCP agreements have a zero deposit but this will result in higher monthly payments.

If opting for a PCP finance agreement, there will be an annual mileage limit. If you exceed this mileage limit and you decide to return the car at the end of the agreement, you may incur additional charges.

Is Personal Contract Purchase the right finance option for me?

PCP is suitable for private customers and is ideal if you would like to have various options at the end of the term in addition to a lower monthly payment.

For a quotation, help, or advice contact your local dealership and ask to speak to one of our Business Managers.

Can you terminate the agreement early?

You can 'voluntarily terminate' a PCP agreement early but you will be required to hand the vehicle back to the finance company and pay, or have paid, at least half of the total amount owed.

What does Guaranteed Minimum Future Value GMFV mean?

When paying monthly for a vehicle with a PCP agreement, you will receive a GMFV figure which guarantees the amount of money the vehicle will be worth at the end of the agreement. It is sometimes also known as the Optional Purchase Payment. If the customer decides to purchase the vehicle at the end of the agreement, the GMFV is the figure that will be paid to become the legal owner. 

What details and documents will I need when applying for PCP finance
  • Full name (and previous name if applicable)
  • Date of birth
  • Marital status
  • Residential status
  • Address history for the past three years
  • Bank details
  • Proof of identity (e.g. a valid UK passport)
  • Proof of current address (e.g. a utility bill dated in the past three months with full name and current address on it)
  • Valid, full UK driving licence