PCP
Car Finance

Personal Contract Purchase (PCP) offers one of the easiest ways to finance a new car in the UK. With PCP, you’ll enjoy lower monthly repayments than other finance options, giving you access to a brand-new vehicle more affordably. As a leading PCP broker, we simplify every step of your application, helping you make the most of this flexible finance choice. Even if you have a challenging credit history, we ensure that PCP remains an accessible, budget-friendly way for you to drive the car you want.

What is PCP?

PCP is a flexible car finance loan with options at the end. You can choose to buy the car, return it, or trade it for a new one.

With PCP, your loan doesn’t need to cover the car’s full price. Instead, you only borrow the amount the lender expects the car to lose in value while you have it (known as depreciation). This often means lower monthly payments compared to other finance options, but you won’t automatically own the car at the end.

PCP might suit you if you enjoy changing cars regularly, don’t drive long distances, and prefer low monthly payments. You’ll agree to a mileage limit and need to avoid damage to avoid extra charges.

How do PCP finance payments work?

You take a £20,000 car on a 4 year PCP deal with a £2,000 initial deposit and £250 monthly repayments. At the end of the 4 years, a final balloon payment of £10,000 is required to own the car. Alternatively, you can return the car without owing anything more or use its value towards a new PCP on your next car.

The monthly payment you'll make will be determined by:

1. The amount of your down payment
2. The specific vehicle you have selected
3. The price of the car you intend to purchase
4. The applicable interest rate
5. Your annual mileage

The projected residual value of the car at the conclusion of your agreement.

The pros and cons of PCP car finance

Some key advantages of PCP finance include:

• Lower monthly repayments than other finance options
• 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

Can you get PCP car finance?

Yes, you can. When you apply, we aim to get you an approval in principle from our panel of lenders through a simple soft credit check. Some lenders prefer a good credit score, which can boost your chances of securing a PCP loan.

Is PCP finance right for me?

PCP car finance is worth considering if:

• You want lower monthly payments to get a more expensive car
• You plan to change cars regularly, usually every 2-4 years
• You drive an average annual mileage that suits contracted mileage limits
• You are comfortable not owning the car until all payments are finished

However, PCP may not suit if:

• You want to own the car with no final payment
• You drive high annual mileages that would exceed limits
• You prefer the flexibility to repay finance early with no penalties

Choosing the best PCP car deal

To find the best PCP deal, compare:

• Interest rates – lower rates mean less overall cost
• Deposit amount – a larger deposit lowers monthly payments but requires more upfront
• Contract length – shorter terms usually mean higher monthly payments

Also consider:

• Mileage allowance – choose one that covers your estimated annual mileage
• Maintenance packages – these cover servicing costs for a monthly fee

Setting these factors up right from the start can help you enjoy affordable, hassle-free motoring.

Can I get PCP car finance with bad credit score?

You can still qualify for PCP finance with a bad credit score or limited credit history. Specialist lenders understand that not everyone has a perfect credit rating and can review your circumstances to match you with suitable PCP deals.

Improving your credit score, like by registering on the electoral roll or offering a guarantor or larger deposit, can boost your chances. Be open with PCP brokers—they have the expertise and resources to help you find a PCP agreement tailored to your needs, even with a bad credit score.

Deposit requirements for PCP

Most PCP deals require an initial deposit, although some zero-deposit options are available.

A larger deposit lowers the amount you borrow, reducing your monthly payments. A zero-deposit PCP, however, means no upfront payment.

Lenders assess each applicant individually to determine the best deposit options. A strong credit history and stable finances can improve your chances of securing a zero-deposit PCP deal.