What is a Personal Contact Purchase (PCP) Deal?

Tim Carpenter
Written by Tim Carpenter

Personal contract purchase – generally shortened to PCP – is another finance option on the market. With PCP agreements, you are able to defer ownership of the vehicle until you reach the end of the contract and, in the meantime, you are effectively leasing or hiring it.

This makes a PCP similar in some ways to hire purchase, although the period of hire is at a typically lower rate, since it is based on the value of the car at the beginning of the contract minus its value at the end (it’s agreed “residual value”).

The PCP you sign represents an agreement to continue paying the monthly payments for the hire of the vehicle. At the end of the contract you may hand back the car to its owners or pay a so-called “balloon” payment representing its agreed residual value in order to own it.

In arranging the finance, we need to assess your credit rating, since that is one of the first steps to be taken by any finance company to whom you make formal application.

Typically, you will need a fairly good credit score in order to be approved for a PCP. If your credit profile isn’t quite perfect, it’d be suggested that a hire purchase agreement may be more suitable for you.

At CarFinance 247, you can buy a car, van, motorbike or caravan via any reputable UK dealership, so the choice really is down to you!

Get a quote
No impact on your credit score
Rates from 6.9% APR. Representative APR 24.9%

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5 years
Total cost of credit £ 2000
Total repayment £ 2000
48 monthly
payments of
£ 245 98

Rates from 6.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £6,500 over 5 years with a representative APR of 24.9%, an annual interest rate of 24.9% (Fixed) and a deposit of £0.00, the amount payable would be £181.16 per month, with a total cost of credit of £4,369.52 and a total amount payable of £10,862.52.

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CarFinance 247 is a trading name of CarFinance 247 Limited, a credit broker and insurance intermediary, and 247 Money Group Limited (247 Money), a lender. Both companies are part of the 247 group of companies.

CarFinance 247 is authorised and regulated by the Financial Conduct Authority under reference number: 653019. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 06035525. Data Protection Registration Number Z1897658.

247 Money is authorised and regulated by the Financial Conduct Authority. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 10989530. Data Protection Registration Number ZA456831.

All finance is subject to status and income. Written quotations on request. CarFinance 247 can introduce you to a limited number of finance providers, including 247Money, based upon your credit rating and will receive commission for such introductions.

† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your account manager can provide more information on this

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