PCP
Car Finance

Personal Contract Purchase (PCP) is a flexible way to finance a new car. It keeps monthly payments lower than other car finance options, so you can drive a new car without paying the full cost upfront.

At CarFinance, a trusted PCP finance broker, we guide you through each step clearly. You stay in control of your budget. Even with poor credit, PCP car finance gives you access to the type of car you want without long-term commitment.

Can I get PCP car finance?

Yes, you can. At CarFinance, we’re a credit broker, not a lender. We work with trusted providers who offer PCP as a flexible car finance agreement.

You’ll go through a soft credit check first. And you’ll need to provide some basic details to match the finance amount and the length of your contract. Some finance company’s offers may suit you better if your credit score’s strong, but we’ll help you secure the best fit.

What is PCP?

PCP (Personal Contract Purchase) is a type of car finance that offers flexible options at the end of the term. You can buy the car outright, hand it back, or use any equity to change your car with a new PCP deal.

You won’t repay the full value of the car. Instead, your loan covers the difference between the cost of the car and its guaranteed minimum future value (what the finance provider expects the car will be worth later). This is known as the depreciation of the car.

Because of this structure, monthly PCP payments are often lower than other finance methods. However, the car isn’t yours unless you purchase the car at the end.

PCP might work well if you drive fewer miles, prefer lower payments, and want a car that holds its value. And if you want to keep the car, you can just buy the car outright at the end.

How do PCP finance payments work?

PCP gives you a flexible car finance option with lower monthly costs compared to buying a car outright. Here's how PCP car finance work in practice.

You take out a four-year PCP contract on a £20,000 car. You put down a £2,000 deposit and make £250 monthly payments. At the end of a PCP agreement, you can pay a final balloon payment plus interest to own the car, or hand back the car.

You could also use any remaining value to start a new PCP agreement. Or simply hand the car back if you don’t want to buy the car.

Your monthly payments will depend on:

1. Your deposit amount
2. The finance amount you borrow
3. The finance term you choose
4. The start of your contract
5. Your annual mileage
6. The future value of the car
7. What the car is worth at the end
8. The interest rate charged

This structure makes PCP one of the most flexible options if you're comparing vehicle finance deals.

The pros and cons of PCP car finance

Some key advantages of PCP car finance include:

• Lower monthly repayments
• Fixed interest rates mean payments do not change over the agreement term
• Chance to regularly change into a new car, usually every 2-4 years
• Flexibility at the end of the contract to suit your needs

However, there are also some disadvantages:

• You do not own the car until the final "balloon payment" is made
• Mileage limits usually apply, with excess charges if you exceed agreed "annual mileage"
• Repaying the loan early can be expensive compared to other finance types
• Returning the car at the end means no asset is retained

Is PCP car finance right for me?

PCP suits you if:

• You want lower monthly payments to drive a newer car rather than buying outright
• You plan to change cars regularly, such as every three-year PCP term
• You drive average mileage within the agreed limits
• You’re comfortable not owning the car unless you pay the final amount

PCP may not suit you if:

• You want to avoid a final payment and own the car from the start
• You exceed mileage limits regularly
• You prefer to repay early without restrictions — in that case, end your PCP deal or consider alternatives from Finance Limited offering the best deals on other options

PCP car deals are always secured against the car, and this type of finance gives more flexibility than a traditional loan.

Can I get PCP car finance with bad credit score?

Of course, you can still apply for pcp finance with a bad credit score. A poor credit score or limited history doesn’t automatically stop you from getting approved. Some lenders specialise in helping drivers with lower scores and can still offer PCP.

You’ll need to show accurate financial details. A bigger deposit or a guarantor can improve your chances. And working with a credit broker like CarFinance helps you find a PCP agreement for a different credit profile — one that fits your budget and circumstances.

Deposit requirements for PCP

Most PCP deals need an initial deposit. Some lenders also offer PCP with no upfront cost.

A larger deposit reduces your finance amount and lowers your monthly payments. A zero-deposit option increases what you repay over time.

Lenders assess your credit profile and affordability. A strong score and steady income can boost your chances of qualifying for a zero-deposit car finance agreement.

What happens at the end of the PCP agreement?

At the end of your PCP finance, you have three clear options:

• Pay the outstanding finance and purchase the car
• Use any equity as a deposit for a new PCP agreement
• Return the car to the finance company’s control, with no extra cost (if mileage and condition meet the terms)