PCP (Personal Contract Purchase)

Personal Contract Purchase is also referred to as PCP. Personal Contract Purchase allows a person to lease a vehicle while retaining an option to purchase at the end of the contract or hand the vehicle back.

PCP has fixed monthly costs with an initial rental of the equivalent of between three and six rentals. The larger the initial payment the lower the monthly payment will be. Conversely, the lower the initial payment made, the higher the monthly payment will be.

So the way it works is; an initial rental followed by fixed monthly rentals over a set period of between one and four years, and then a final optional payment. This payment can be made if you choose to keep the vehicle, but if not then you have the choice of handing the car back with nothing else to pay.

If you are a company car driver looking to opt out of a company car scheme to avoid Benefit In Kind taxation then this could be the finance package for you. This type of agreement allows some freedom from some company car schemes that can prove to be very rigid when it comes to the choice of company vehicle.

Alternatively; If you are a private individual looking for a personal finance agreement with an option to own the vehicle at the end of the contract then this could be the choice for you.