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Contract Hire and Leasing Guide

PCP Personal Contract Purchase

All Vehicle Contracts Contract Hire and Leasing Guide - PCP Personal Contract Purchase
  • PCP Personal Contract Purchase


    Personal Contract Purchase (PCP)


    This type of agreement is effectively a finance agreement that offers more affordable, lower monthly payments compared to that of normal hire purchase. The agreement will either be Regulated or Unregulated under the Consumer Credit Act.


    Affordable, lower monthly payments are achieved by financing the vehicle and deferring the predicted minimum future value or deprecation element of the vehicle as one payment payable at the end of the term. This payment is usually referred to as a Guaranteed Minimum Future Value (GMFV), balloon payment or option to purchase figure.


    To make life as simple as possible, the All Vehicle Contracts website helps you choose and compare which vehicle and lease purchase or hire purchase agreement is right for you. Interactive quotation options and full vehicle comparisons, on virtually any make, model or manufacturer, are available for you to explore and compare online.


    Why choose Personal Contract Purchase?


    PCP is one of the most popular forms of vehicle financing and it is normally a fixed cost, fixed period loan of money that is linked (or secured) to the purchase of a vehicle.
    Affordable, fixed cost motoring can be tailored to suit your monthly budget and annual mileage, making budgeting easier and straightforward.

    PCP pros

    PCP offers fixed repayments over a term that suits you
    Personal Contract Purchase allows for a low initial outlay - choose your own initial payment starting from no deposit contribution, linked to term which is usually between 24-48 months
    PCP is popular with company car drivers wishing to opt out of their existing company car scheme, as well as personal users just looking for a good deal; it is a good alternative and one to compare against Personal Contract Hire
    Acquiring a new vehicle on PCP (Personal Contract Purchase) often works out being far more cost effective than financing older or dated vehicles. By taking advantage of the latest new vehicle technology and more affordable lower monthly payments, you could be surprised at the savings you can make and could be driving a new car for a lot less than you think

    PCP FAQs


    What do manufacturers call PCP (Personal Contract Purchase)?


    Currently, Toyota refer to PCP as Access while Ford refer to it as Ford Options. Peugeot call it Passport Personal Lease and Audi, VW, Seat and Skoda all use the term Solutions. Other manufacturer PCP names include Renault Selections, BMW Select, Mini Select, Mercedes-Benz Agility, Smart Agility, Jaguar Privilege, Mitsubishi Alternatives, Citroen Elect 3, Volvo Advantage, Fiat i-deal, Chrysler Horizon, Alfa Romeo Preferenza, Jeep Horizon, Kia Access, Nissan Preferences, Lexus Connect, Vauxhall Flexible PCP, Porsche Solutions, Infiniti Selectiviti, and Land Rover Freedom.

    What is PCP called by All Vehicle Contracts?

    To make life as simple as possible, All Vehicle Contracts refer to PCP as Personal Contract Purchase and have optimised our website to help you choose and compare which vehicle and PCP deal is right for you. Interactive quotation options and full vehicle comparisons,  on virtually any make, model or manufacturer, are available for you to explore and compare on line.

    What are the options at the end of the PCP agreement?

    You can arrange to sell or part exchange the vehicle at the close of your contract, and any figure gained over and above the guaranteed future value will be yours to put towards your next car. This may assist you when entering into a new agreement without recourse to your own funds.

    You can also choose to purchase the vehicle at the close of your contract for the Guaranteed Minimum Future Value (GMFV) - this may attract an option to purchase fee; if applicable, this will be documented on your agreement.

    The Guaranteed Minimum Future Value (GMFV) is a conservative estimation – this is usually set to be below the anticipated vehicle resale value from the outset. This is guaranteed by the manufacturer or finance company which means that you will know the least amount that your vehicle will be worth at a point in the future.

    Personal Contract Purchase - what is the typical period?


    Personal Contract Plans are usually set for periods of between 24-48 months, and in some cases 60 months; short period PCP contracts are not available.

    Personal Contract Purchase - what is the typical initial payment?

    Personal Contract Plan initial payments can be without deposit contribution or alternatively, a deposit to suit your requirements. Of course, the higher the initial payment, the lower the monthly payment. Therefore, it is important to check advertised prices and compare like for like initial payments when making comparisons.

    Personal Contract Purchase - what are the contract profiles?

    Personal payment profiles consist of an initial or no initial payment, and monthly payments for the total months, and usually work as follows:

    Example 36 Months - Initial or no initial payment followed 36 payments with the Guaranteed Minimum Future Value (GMFV) payment counted as the 36th Payment.

    Initial or no initial payment followed 36 payments with the Guaranteed Minimum Future Value (GMFV) payment counted as the 37th Payments.

    Documentation fees charged by the finance company are usually payable by direct debit upon signing or they may be collected at the same time as the first monthly payment, usually on a common monthly date (e.g. one month after signing); information is detailed on the final documentation.

    What happens if I want to hand my PCP vehicle back early?

    If you return the vehicle back early or the Guaranteed Minimum Future Value (GMFV) does not cover the future value, you have an obligation to make the vehicle available for inspection. Of course, it is impossible to return a vehicle without acceptable fair wear and tear such as small stone chips, and light scratches.

    Please click the following link that detail fair wear and tear and vehicle hand-back procedures.

    Guide/PCP-fair-wear-and-tear-guide

    What happens if I hand the vehicle back over the agreed contract mileage?


    If you return the vehicle over the terms of a contract purchase agreement there will be an excess mileage charge, which documents excess mileage from the outset; this is charged at pence per mile.

    If you settle the agreement early, mileage is aggregated and calculated accordingly; if you are under the mileage, there is no refund.

    What happens if I want to end the Personal Contract Purchase agreement?

    The agreement will either be Regulated or Unregulated under the Consumer Credit Act, and your rights are unaffected. Early settlement terms and conditions are detailed on the agreement, the early settlement calculations are calculated by the relevant finance company that refer to Rule 78, commonly used by most finance companies.

    You may settle the agreement at any time if a balance is outstanding, including the GMFV payable to the lender. The lender may allow the customer a rebate of the interest remaining on the agreement. However, if the agreement is regulated under the Consumer Credit Act, the minimum amount of rebate is laid down by law.

    You have an obligation to make the vehicle available for inspection upon its return. Of course, it is impossible to return a vehicle without acceptable fair wear and tear such as small stone chips, and light scratches. Please click the following link that detail fair wear and tear and vehicle hand-back procedures.

    How All Vehicle Contracts use your personal data

    Here at AVC, we take our Privacy Policy very seriously and that means your personal data too. Your personal information is used to enable us to provide you with our services and update our records about you.

    You are entitled to request a copy of the personal information we hold about you and we will not disclose your personal information outside of All Vehicle Contracts without your permission to do so; however, we may supply information to Police forces and central government if required to do so, in full compliance of the Data Protection Act.

    For more details, view our full Privacy Policy.

    Compliance-Your-Rights/Privacy policy

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