How Personal Contract Purchase (PCP) Works

What is PCP?

What is Personal Contract Purchase?

Personal Contract Purchase (PCP) is a finance scheme that allows your monthly payments to be reduced, because an agreed fee is deferred until the end of the contract. Essentially, you only repay part of the value of the car over the term of the agreement. Each contract typically lasts between 24 and 48 months. You'll pay an initial deposit, followed by monthly payments at have three choices at the end of the agreement:

  1. Pay the guaranteed future value (aka 'balloon payment') to own the car outright.
  2. Exchange your car for a new model, and a new PCP agreement.
  3. Hand the car back and walk away.

At the beginning of the contract, the team here at Sturgess Group will help you decide on the amount you wish to deposit, your monthly payment plan and the estimated mileage you are likely to incur. Everyone has different needs, so the payment options at Sturgess of Leicester are flexible and dependent on what you can afford and what you're prepared to pay.

At the end of your contract, you can pay off the previously-agreed end amount (often called a ‘balloon’ payment or the Minimum Guaranteed Future Value), or part-exchange it for another vehicle. This final amount will be calculated at the start of your agreement using industry data, and is often adjusted so that you are left with enough equity for your next purchase. This means that you're protected if the price of your car depreciates faster than expected.

PCP provides you with a flexible scheme, suited to your needs. It is typically lower risk than being granted an outright loan and provides you with lower monthly payments and greater control when it comes to how long you would like to continue your contract.

PCP is only available through car dealerships, and at Sturgess Motor Group we have years of experience arranging tailored finance options for our customers, whether they are buying new or approved used vehicles. Take a look at our latest finance offers for our latest options on new Alfa Romeo, Fiat, Jaguar, Hyundai, Land Rover, Suzuki and Volvo cars or contact us for more information on how PCP can benefit you.

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