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Finance Explained

Understand your buying options

Personal Contract Purchase (PCP)

Personal Contract Purchase, usually known as PCP, is a very popular way to purchase a car that has some great benefits. It defers some of the vehicle cost until the end of the finance agreement. The deferred amount is known as the Guaranteed Minimum Future Value (GMFV) or sometimes as the Optional Final Payment. Interest on this deferred amount is included in the monthly payments that you are quoted.

You have the flexibility to choose the amount of deposit and the term of the agreement and as this is a fixed interest loan the payments will not change during the agreement.

You agree an annual mileage as part of this agreement and it is important that this is accurate. If you exceed the agreed mileage, and choose to hand your car back at the end of the agreement, then excess mileage charges will apply. Your car must also be in fair condition for its age and mileage. Your vehicle is at risk of repossession if you do not maintain the contractual repayments. We receive a commission from the Finance Lender if you take out a finance agreement.

*At the end of the agreement you have three choices:

  • 1. Pay the GMFV in order to own the car;
  • 2. Hand the car back.
  • 3. Use any value above the GMFV as a deposit against another car.
  • There is no guarantee that there will be any value above the GMFV.

Personal Contract Hire (PCH)

Personal Contract Hire, usually known as PCH, is another popular way to pay for the use of a car that has some great benefits. It's a fantastic option if you want to drive a new car every few years, and don't want the option of ownership.

Just pay your initial rental, and then make your monthly rental payments for the length of the agreement.

Hire Purchase (HP)

Hire Purchase is a way to buy a vehicle with the flexibility to choose the amount of deposit and the term of the agreement. As this is a fixed interest agreement the monthly payments will not change during the agreement.

This is an agreement secured against the vehicle and you will not own the vehicle until you have made all of the payments, including any option to purchase fee. You can settle the agreement at any point by paying the outstanding amount.

Your vehicle is at risk of repossession if you do not maintain the contractual repayments. We receive a commission from the Finance Lender if you take out a finance agreement.

Representative Finance Example For Online Purchases

Customer deposit £2,040
Monthly payments £125.88
Cash Price £10,350
Amount of credit £8,310
Fees £0.00
Optional final payment £4,936
Total amount payable £13,018.24
Annual mileage 8000*
Term 48 months
Fixed rate of interest 5.25%
Representative APR (fixed) 9.90%