PCP Finance

What is PCP Car Finance?

If you've ever wondered "what is PCP car finance?, PCP stands for Personal Contract Purchase. It is a popular way to finance a car without paying the full price upfront. You make monthly payments, and at the end of the contract, you have the option to buy the car by paying a final balloon payment, or you can return the car.

How Does PCP Car Finance Work?

Here is how PCP car finance works in a few simple steps:

Initial Deposit: Usually, you'll begin by putting down an upfront deposit. This is usually between 10% and 20% of the value of the car.

Monthly Instalments: Based on the deposit and the car's projected value at the end of the term, you'll make monthly payments for a set period, typically between 24 to 48 months.

Balloon Payment: At the end of the contract, you will have the option to:

1) Pay the balloon payment: This is the amount of money you need to pay to own the car outright.

2) Return the car: You will not have to pay the balloon payment, but you may have to pay a mileage charge if you have exceeded the agreed mileage allowance.

3) Part exchange the car for a new one: You can use the car you are currently leasing as a part exchange for a new car. This can help you to reduce the amount of money you need to pay for the new car.

Here are the steps on how to obtain PCP car finance with Border City Autos:

1. Head to our Finance page and click 'free credit check'.

2. Enter your personal details, such as your name, date of birth, and address.

3. We will then run a soft credit check to see if you are eligible for PCP finance.

4. If you are eligible, we will give you a quote for PCP finance.

5. You can then shop our used cars in Carlisle that are within your price range.

Want to explore PCP with Border City Autos? Get started with a free credit check to determine your eligibility.

Advantages & Disadvantages of PCP

Advantages:

• Lower Monthly Payments: Typically, monthly payments are lower with PCP than with other finance deals.
• Flexibility: At the end of the term, you can decide whether to buy the car, return it, or start a new PCP deal.
• Access to Newer Cars: PCP often allows individuals to drive a newer car than they might have afforded otherwise.

Disadvantages:

• High Final Balloon Payment: The final balloon payment is the amount you need to pay to own the car at the end of the contract. This is usually much higher than the monthly payments.
• Mileage Restrictions: PCP deals often come with mileage limits. Exceeding these can incur charges.
• Wear and Tear: Any damage beyond "fair wear and tear" can result in additional charges.

FAQ's - PCP Finance Explained

• What credit score do you need for PCP finance? While there isn't a fixed credit score, a good credit rating increases the chances of approval. However, some of our lenders cater to those with poorer credit scores.
• Is PCP better than HP? PCP can be a good option if you want to drive a new car without having to pay the full price upfront. The monthly payments are typically lower than if you were to take out a personal loan or hire purchase agreement. However, it is important to remember that you will still have to pay the final balloon payment at the end of the contract, so you need to make sure that you can afford it.

HP can be a good option if you want to own the car outright at the end of the contract. However, the monthly payments are typically higher than PCP.

If you're struggling to decide which type of car finance is right for you, contact our team. We can help you to compare different deals and find the one that best meets your needs.

• Can you end PCP early? Yes, if you've repaid 50% of the total finance amount, you can usually end the PCP deal early.
• Can you part exchange a car on PCP? Yes, if there's equity in the car (its value is more than the remaining finance), you can use this as a deposit for a new PCP deal.
• Can you sell a car on PCP? Not until you've settled the finance. If you wish to sell, you'd first need to pay off the remaining balance.
• Can you modify a car on PCP? Typically, modifications can affect the car's Guaranteed Minimum Future Value, and you might face charges at the end of the contract. Always check your agreement first.

For more insights and PCP finance deals, contact our team. If you're keen to browse our cars on PCP finance or need a PCP finance quote, Border City Autos is here to explain every step of the process.

FAQs