PCP Finance

Personal Contract Purchase

Personal Contract Purchase (PCP) is a form of hire purchase agreement, which includes a voluntary "balloon" payment at the end. This final amount represents the future residual value of the car, based on the age of the vehicle at the end of the agreement and the forecast mileage.

Monthly repayments are generally lower under a PCP agreement than a comparable HP agreement because of this deferred amount. With this type of agreement, payment of the future value of the car is optional. it must be paid if you wish to own the car outright, but you could simply decide to hand the keys back and start another agreement for a different vehicle.