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Personal Contract Purchase

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

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 their contract, then they pay fixed monthly payments and finally have an Optional Final Payment (OFP) at the end at the end of the contract which is also referred to as a GFV (Guaranteed Future Value). You can trade-in 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 your next 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, by finding a company to re-finance the OFP.

Advantages:

  • Low initial payment
  • Fixed monthly payments
  • You may be able to refinance the OFP
  • No depreciation concerns if you wish to walk away at the end
  • Maintenance and servicing can be included
  • Fixed OFP when you first take out the contract

Disadvantages:

  • At the end of the contract you will have to decide whether you wish to sell the vehicle, return it or keep it
  • You must have fully comprehensive vehicle insurance
  • If you decide to return the vehicle at the end of the contract, it must be returned in a well maintained condition otherwise you will be charged for any damage over and above that stated in the ‘Fair Wear and Tear Guide’
  • You will be charged for all mileage in excess of the contract mileage (pro rata), should you choose to return the vehicle at the end of the contract

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 have an Optional Final Payment (OFP) at the end at the end of the contract which is also referred to as the Guaranteed Future Value (GFV).

You can trade-in your vehicle at a dealership and take another vehicle from them. If the trade-in value is larger than the Optional Final Payment (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 Optional Final Payment (OFP) in full or you will find that most companies offer the opportunity to re-finance the Optional Final Payment (OFP).

Have a question about Personal Contract Purchase?

Call: 0121 45 45 645
Email: info@nationalfleetservices.net
Alternatively use our contact form.


National Fleet Services Limited is authorised and regulated by the Finance Conduct Authority.

National Fleet Services Limited can introduce you to a number of finance providers, we receive a remuneration if you enter into an agreement with them.

National Fleet Services Limited is a credit broker and not a lender.

BVRLA Registration Number: 1463 | Financial Conduct Authority Licence Number: 680691

Company Registration Number: 03247145 | ICO Registration Number: Z5088418 | VAT Registration Number: 695548379

Registered Office: 5 The Croft, Buntsford Drive, Bromsgrove, B60 4JE

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