Who pays for repairs and servicing on a PCP car?

• Routine servicing, maintenance and repairs of the car are your responsibility with PCP.

• Warranties, insurance providers and maintenance packages may cover some repair and servicing costs.

• Returning the car with damage beyond fair wear and tear can result in extra charges.

When you take out PCP car finance, you pay for servicing and repairs on a PCP car, not the finance company. Although the lender legally owns the vehicle for the length of the agreement, you're the registered keeper, and your contract requires you to keep the car in good condition. That covers routine servicing, general maintenance, and any repair that isn't picked up by a warranty, your insurance or a maintenance package.

Let's take a closer look at what you'll need to pay for, what could be covered and what happens if something goes wrong with your car.

Are you responsible for servicing a PCP car?

In a PCP agreement, the driver is responsible for routine maintenance. But does PCP include servicing? No, servicing is generally one of the costs you need to budget for yourself, unless you have added a maintenance package. As the driver, you're responsible for servicing and regular maintenance of the car, including the yearly MOT and basic upkeep.

Most PCP servicing rules require you to get the car serviced in line with the manufacturer's recommended schedule, which you can find in the handbook or service record book.

This is because with PCP, you could choose to hand the car back at the end of your loan term. If you do choose to return it, it needs to be in good condition, or you'll face extra fees. At the end of your agreement, the car will be checked for damage that goes beyond the British Vehicle Rental and Leasing Association (BVRLA) fair wear and tear guidelines. Fair wear and tear means the minor damage that comes from regular driving. This includes light scratches, small dents, and slight alloy scuffs. But more serious damage, such as deep scratches, significant chips or cracked glass, will likely result in charges.

What maintenance costs are included in a standard PCP contract?

A standard PCP deal covers the depreciation and finance of the car. The day to day running costs of the car fall to you. Drivers pay for:

• Routine servicing: This includes things like oil changes, filter replacements and topping up brake fluid when needed.

• MOTs: New cars need their first MOT from three years after registration, but used cars over three years old need an MOT every year.

• Tyres, wipers and brakes: These are classed as wear-and-tear items that naturally need replacing as you use the car, so you'll need to cover the cost.

• Repairs not covered by warranty or insurance: If something goes wrong with the car and the repair isn't covered by the manufacturer's warranty or your insurance, you'll be responsible for paying for it.

These costs are part of the standard PCP servicing rules that you need to be aware of, and it's a good idea to budget for these in addition to the monthly loan repayments. This includes keeping up with scheduled servicing, replacing parts that naturally wear out and making sure the car remains road safe throughout the agreement.

As the driver, you're responsible for keeping your car road safe and in a good condition to return it at the end if you choose to.

What is a PCP maintenance package and is it worth it?

A maintenance package is an optional extra you can add to some PCP agreements. Although we don't offer maintenance packages at Car Finance 247, it can cover some of the costs of keeping your car well maintained during the agreement, so you don't have to pay for everything as and when it comes up. What's included depends on the lender and the package you opt for, but here's an idea of what you can expect.

What is usually included?

• Routine servicing and replacement parts: Manufacturer-recommended servicing and replacement parts like oil change and filter replacements.

• Wear-and-tear items: The replacement of parts that naturally wear down over the years, such wipers, brakes and the exhaust.

• MOTs: The cost of MOT tests (usually around £100) if your agreement lasts beyond three years.

• Breakdown cover: May include 24/7 roadside assistance if your car breaks down, or home start help should your car break down at home.

What is usually excluded?

• Accidental damage: Dents, scratches or other damage caused by a collision or accident.

• Theft and vandalism: Damage or losses caused by theft, attempted theft or deliberate damage to the vehicle.

• Misfuelling: Costs from putting the wrong fuel in the car and any resulting damage.

• Paint and bodywork damage: Cosmetic damage such as scratches, dents or damage to the paintwork.

• Windscreen replacement: Chips, cracks or replacement of the windscreen and other windows.

A maintenance package could be a good option if you want extra peace of mind. It could also be worth it if you prefer to have some of your car's maintenance costs covered in your monthly payments rather than up front if something goes wrong. But, it won't cover everything, and packages differ, so it's still important to check what's included.

What does the manufacturer's warranty cover on a PCP car?

Many new PCP cars come with a manufacturer's warranty that protects against manufacturing defects. Mechanical and electrical faults are typically covered. Things like corrosion and rust are also often included as part of an extended warranty, with some manufacturers covering up to twelve years.

However, wear-and-tear items including tyres, brake pads, clutch, wipers are generally not covered. Neither is accidental damage, misfuelling, any car modifications you make, or vandalism.

It's also worth noting that warranty durations vary by manufacturer. The industry standard is three years, but some brands offer longer base warranties. For example, Hyundai's base warranty is currently 5 years and Kia's base warranty is 7 years. Mileage limits can also apply to warranties, so it's worth checking these too.

When you service your car, check the manufacturer's requirements first. Not maintaining it properly could impact your warranty cover. Always check the warranty terms for your particular car to see exactly what's included.

What happens if your PCP car breaks down or needs repairs?

If your PCP car breaks down or needs repairs, you are responsible for getting it fixed and must pay for the repairs yourself, unless it's covered by your warranty, maintenance package or insurance.

The first thing to do is check your warranty to see whether the issue is covered. If it is and the warranty is still valid, contact the warranty provider to find out how to arrange the repair. If it's not included in your warranty, it's worth checking what your insurance covers. If you have breakdown cover, you may be able to deal with it through your insurance provider.

When it comes to repairs, standard car insurance generally doesn't cover general wear and tear, such as worn brake pads, tyres or clutch. It also typically excludes mechanical breakdowns that happen naturally over time. But, if you have a fully comprehensive policy, it may cover repairs if the damage was caused by a sudden, unexpected event such as an accident, fire, theft or vandalism.

If the repair isn't covered by your warranty, insurance or maintenance package, you'll need to pay for it yourself. In a PCP agreement, drivers generally have freedom to choose their own garage for servicing and repairs, as long as the approved car parts are used.

It's important to note that your finance agreement doesn't change; you still need to make your monthly payments as normal, even if your car has broken down or is in for repairs. Check out our guide on what happens if you crash a car on finance for more advice on what to do if your car is seriously damaged or written off during a PCP agreement.

What happens if you damage a car on PCP?

Who pays for repairs on a PCP car depends on the type and extent of the damage. If the damage is covered by your insurance or a maintenance package, you may not have to pay the full repair cost. But if it isn't covered, and the damage is considered beyond fair wear and tear, you'll generally need to pay for the repairs yourself.

When you return a PCP car at the end of the agreement, the lender will arrange an end-of-contract inspection to check its condition. The car is assessed against the BVRLA's fair wear and tear guidelines.

Again, minor damage that's expected from normal use, like small stone chips and light surface scratches, are generally considered fair wear and tear. But, anything beyond this, including missing parts, deep scratches, cracked glass or big dents can result in you being charged the repair fees.

If you notice any minor damage before returning the car, it may work out cheaper to get it repaired yourself rather than paying the lender's repair charges after the inspection.

The takeaway

In a PCP finance agreement, you're responsible for all the routine maintenance and servicing of the car throughout the agreement. If you choose to hand the car back at the end, it's expected to be in good condition, and you'll need to pay for any damage that's considered beyond fair wear and tear.

If a maintenance package is available to add onto your PCP agreement, this could help cover some of the costs of standard servicing and repairs and give you more peace of mind. This usually covers things like routine servicing, wear-and-tear items, MOTs and, depending on the package, breakdown cover. But, packages differ so read the T&Cs carefully.

If your car develops a fault during your agreement, the manufacturer's warranty may cover manufacturing defects and certain mechanical or electrical faults. It's important to check what yours covers and the dates it's valid for.