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What is personal contract purchase (PCP)?


The amount of payment plans and schemes now available when you buy a new car has increased over the last few years, with many that seem better than they really are. One scheme that has benefited thousands of people already is personal contract purchase (PCP), which is a different form of personal car leasing that can give you much lower monthly payments. Here we answer a few of the most frequently asked questions.

What Is Personal Contract Purchase (PCP)?

It’s a form of personal car leasing that has a few key differences which makes it better for some people but not for others. It’s essentially a contract where instead of paying monthly instalments for the entire value of the car, you pay for the calculated depreciation value for however long you take out the contract, which is usually around three years, but can be more or less if you choose. It has become popular thanks to its flexibility, as once you have chosen a car you can decide how much of a deposit you want to pay and how long you want the contract to last. You then tell them how many miles you do a year and we will then give you the monthly price.


Is It Cheaper Than Standard Personal Car leasing?

This mainly depends on whether you want to keep the car at the end of the contract. Before you take it out, you will be given a guaranteed future value price (GVP), which is sometimes known as the balloon payment. This is a calculation by the lender of what the car will be worth at the end of your lease, and your payments are worked out from the difference between this and the current value of the car, with a bit of added interest. The GVP will then be the price of the car if you wish to buy it after the contract, but if you don’t you can simply hand it back with no obligation, making it a more affordable option for people who have no intention of keeping the car.

What Are The Main Benefits of Personal Contract Purchase (PCP)?

  • Low initial payment
  • Fixed monthly payments
  • Two, Three or four year contracts available
  • Optional maintenance package
  • Option to purchase, Part exchange or return the vehicle at end of contract
  • Road Fund Licence, Manufacturers warranty and in nearly all cases, comprehensive breakdown cover is included
  • Free delivery and collection to UK mainland

Business & Personal Car Leasing From Select Contracts

At Select Contracts we offer personal contract purchase on any on make or model vehicle, which can save you considerable money compared with buying, finance or standard leasing. We also have other business and personal car leasing for highly competitive prices. With our professional service you can get a quote on any make or model of car or commercial vehicle, with free UK delivery from a national network of dealers and vehicle preparation centres.

For more information on any of our cars or services, please get in contact with us by emailing info@selectcontracts.co.uk or call 0845 6770 770.

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Great service from Ali with constant updates. Delivery of the vehicle was well executed
Polyteck Building Services Ltd

Tuesday, 28/06/2022