Unsure of what's best for you?
Read up on the simple explanations below to help you make the right decision for you and your budget.
Read up on the simple explanations below to help you make the right decision for you and your budget.
Pros & Cons of a PCP Deal
Generally lower monthly repayments than a typical Hire Purchase agreement
Flexible repayment terms to help suit your monthly budget
No minimum or maximum deposit, so you can have more control over the amount of finance required
Fixed interest rates, so you know exactly what you’re paying every month for the length of the term
At the end of the agreement, you can purchase the vehicle outright, return the vehicle to the lender, use it as part exchange for your next vehicle or refinance the balloon payment into a new HP agreement, subject to finance approval
You don’t own the vehicle until you’ve made your final payment, including the final balloon payment, which means the vehicle could be repossessed if you do not maintain contractual payments
You cannot sell or give the vehicle away until you have paid all of the repayments under the finance agreement
Excess mileage charges apply, as documented in the finance agreement prior to purchase
If the predicted Guaranteed Minimum Future Value (GMFV) is set very close to the actual value of the vehicle, there will be little equity to roll onto another deal
The vehicle’s future value is based on its condition in comparison to vehicles of the same age and mileage. Any damage that is not down to normal wear and tear will need to be rectified by the customer
Generally lower monthly repayments than a typical Hire Purchase agreement
Flexible repayment terms to help suit your monthly budget
No minimum or maximum deposit, so you can have more control over the amount of finance required
Fixed interest rates, so you know exactly what you’re paying every month for the length of the term
At the end of the agreement, you can purchase the vehicle outright, return the vehicle to the lender, use it as part exchange for your next vehicle or refinance the balloon payment into a new HP agreement, subject to finance approval
You don’t own the vehicle until you’ve made your final payment, including the final balloon payment, which means the vehicle could be repossessed if you do not maintain contractual payments
You cannot sell or give the vehicle away until you have paid all of the repayments under the finance agreement
Excess mileage charges apply, as documented in the finance agreement prior to purchase
If the predicted Guaranteed Minimum Future Value (GMFV) is set very close to the actual value of the vehicle, there will be little equity to roll onto another deal
The vehicle’s future value is based on its condition in comparison to vehicles of the same age and mileage. Any damage that is not down to normal wear and tear will need to be rectified by the customer
Pros & Cons of a HP Deal
No minimum or maximum deposit price, so you can have more control over the amount of finance required
Flexible repayment terms to suit your monthly budget
Fixed interest rates, so you know exactly what you’re paying every month for the length of the term
You don’t own the vehicle until you’ve made your final payment, which means the vehicle could be repossessed if you do not maintain contractual payments
You cannot sell or give the vehicle away until you have paid all of the repayments under the finance agreement
No minimum or maximum deposit price, so you can have more control over the amount of finance required
Flexible repayment terms to suit your monthly budget
Fixed interest rates, so you know exactly what you’re paying every month for the length of the term
You don’t own the vehicle until you’ve made your final payment, which means the vehicle could be repossessed if you do not maintain contractual payments
You cannot sell or give the vehicle away until you have paid all of the repayments under the finance agreement
