What Is PCP Finance?
PCP (Personal Contract Purchase) is one of the most popular ways to finance a car. It offers lower monthly payments compared to other finance options, with the flexibility to either return, part-exchange or buy the car at the end.
How PCP finance works
PCP is a 3-part agreement designed to keep your monthly payments lower.
PCP finance example
Example based on a car price of £30,000 over 48 months at 9.9% APR representative.
Example figures only. Your actual payments depend on your credit profile, deposit and the lender we match you with.
Pros and cons of PCP finance
PCP can be a great option, but it's important to understand the benefits and considerations.
- Lower monthly payments
- Fixed payments make budgeting easier
- Option to change your car every few years
- You only pay for the value you use
- Flexible end-of-term options
- You don't own the car unless you pay the final payment
- Mileage limits — excess charges may apply
- Condition charges if the car has damage
- Final payment can be large if you want to own the car
- A bigger deposit may unlock the best rates
Who is PCP best for?
PCP is ideal if you:
PCP vs HP finance
The two most popular UK car finance options — here's how they compare side by side.
| Feature | Personal Contract Purchase (PCP) | Hire Purchase (HP) |
|---|---|---|
| Monthly payments | Lower | Higher |
| Deposit | Typically 10% | Typically 10%+ |
| Mileage limits | Yes — usually 6k–15k / year | None |
| End of agreement | Return, part-exchange or pay balloon | You own the car |
| Balloon payment | Yes (Guaranteed Minimum Future Value) | No |
| Flexibility | Higher | Lower |
Frequently asked questions
Quick answers to the most common questions about PCP car finance.