What's the difference between PCP and Hire Purchase (HP)?

The main difference is the balloon payment. With HP, your monthly payments cover the full value of the car, and you own it outright at the end, so payments are higher. With PCP you only finance the depreciation, which keeps monthly costs lower but leaves a large final payment if you want to keep the car. HP suits drivers set on owning the car; PCP suits those who want lower payments and flexibility at the end of the term.

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Personal Contract Purchase (PCP)

At Charles & Dean, we specialise in Personal Contract Purchase (PCP) car finance – a flexible, affordable way to drive the car you love. Whether upgrading, exploring a performance model, or seeking affordability, we’ll guide you through the process.

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What is PCP?

Understanding Personal Contract Purchase (PCP)

Personal Contract Purchase (PCP) is a flexible and popular vehicle finance option that lets you pay for the car’s depreciation over the agreement term, rather than its full value, making monthly payments more affordable.

Initial Deposit: Your First Step Forward

The journey begins with a deposit, typically ranging from 10% to 30% of the vehicle’s value. This upfront payment can reduce the amount you need to finance, helping lower your monthly payments.

Monthly Payments: Affordable & Fixed

Pay a fixed monthly amount over a term of 2–4 years. The payments are based on the car's expected depreciation, making them more affordable compared to other finance options.

End-of-Term Options: Choose Your Path

At the end of the contract, you have three options:

1) Pay the final balloon payment to own the car

2) Return the car with no further obligations

3) Trade it in for a new model and start a new agreement

4) Refinance balloon position (subject to status)

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Product Suitability

Is Personal Contract Purchase Suitable for You?

Personal Contract Purchase (PCP) offers a flexible way to drive your dream car with lower monthly payments and a range of end-of-term options. However, like any finance option, there are both benefits and drawbacks.

Here’s a breakdown to help you make an informed decision:

Benefits of PCP:

Lower Monthly Payments Pay less each month compared to other finance methods like Hire Purchase (HP).

Flexible End-of-Term Options Keep the car, return it, or upgrade to a new model - the choice is yours.

Equity Protection If the car's value falls below the balloon payment, you can return it to the lender after paying at least half of the total amount due.

Quick Process PCP agreements are straightforward, getting you on the road faster.

Drawbacks of PCP:

Higher Total Borrowing Cost Interest applies to the entire agreement, including the balloon payment.

Mileage and Condition Restrictions Exceeding limits or returning a poorly maintained car can lead to charges.

Balloon Payment Commitment If you want to keep the car, you'll need to make a significant final payment.

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Recently Funded

BMW M4 Competition

£43,000

Competitive & Tailored Solutions

We leverage strong relationships with a diverse panel of lenders to secure market-leading rates and flexible terms that align with your financial goals.

Specialist Market Insight

Our extensive market knowledge allows us to cross-reference offers, ensuring you receive a deal that suits your specific needs while considering both rates and overall product suitability.

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Understanding Unique Vehicle Value

We understand the value of unique vehicles, allowing us to offer financing with more accurate and often favourable residuals, providing additional financial benefits.

"I have frequent & direct contact with the C&D team. The team does vehicle funding for a living, so I trust them completely when I ask for bespoke advice regarding my future plans.

That customer relationship is something I value very much, which I’ve never had anywhere else."

Will

BMW M2

"From start to finish I couldn't be more pleased with how helpful Dean and Jack have been with arranging the finance for my new car.

Everything was perfectly explained and the process couldn't have been any smoother. I was very surprised with how quick everything was too.

I can't thank the C&D team enough for their faultless service!"

Nathan

Ford Fiesta ST

"An exquisite experience. Jack R and the Operations team made the transaction seamless from my original enquiry to picking up my new BMW just a few days later.

Very happy - thank you!"

Oliver

BMW M440d

FAQs

Your questions about PCP finance answered

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Can I settle my PCP agreement early?

Yes, you can settle early by paying off the outstanding balance, though early settlement fees may apply. Speak to our Finance Specialists for guidance.

What happens if I exceed the mileage allowance?

You’ll incur an excess mileage fee based on the rate agreed at the start of your contract. If you anticipate exceeding limits, contact us to explore your options.