PCP or Buy Choices

This is where it gets interesting and depends on your situation, ask your self do you have a good credit rating and are you likely to be offered finance?

The below is our opinion only and you must make your own opinions as to what suits you best.

We strongly recommend that you check the internet for further information.


If you have the finances you may be able to buy your car outright. Or if you can arrange a private loan through family or friends this may well give you the opportunity to purchase outright and avoid any interest or loan charges, in addition you will not be liable for any damage affecting future values at the end of a contract.

The biggest issue is how much can you afford and what will you be able to get for that budget. You should consider your usage if you anticipate a low annual mileage a higher than average mileage car may offer you the opportunity of a “younger later registration plate”.


Hire Purchase

Hire purchase may usually be considered as simply a loan to help you buy the car, the bigger deposit that you can pay the lower your monthly payments will be.

How long are you happy to take the finance for? The longer the period the lower monthly payments will be common terms are 36-60 months. You may choose a monthly payment to calculate your budget, if you decide that you are happy with say £100.00 over 36 months yu will have a lower budget than paying the same amount over 60 months.

There are options for zero interest and in some cases a balloon payment similar to a personal contract plan.

At the end of the loan period if you have paid all invoices you will own the vehicle.


Personal Contract Plan (PCP)

Without doubt many people are now using this option and manufacturers offer incredibly attractive looking deals on new cars with low and sometimes zero deposits and what can look like low monthly payments. As with anything there are pro’s and cons particularly if you exceed agreed mileage, we have copied the following information from Money Saving Expert, please read the full article here:



You get behind the wheel of a new car for lower monthly repayments than a personal loan or hire purchase.

You don’t need to worry about the future trade-in or resale value of the car, as the lender guarantees your car will be worth a minimum sum at the end of the deal.

It’s flexible. You’ve several options at the end of it – you can even buy the car if you like.

Dealers will often throw in service and maintenance packages, warranties and insurance so you can get your total cost of motoring down to one payment each month (though check these are free, or if not, represent good value).

A PCP may let you buy a more expensive car than you might otherwise be able to afford but with monthly payments to suit your budget.

As PCP deals are usually only offered on new or nearly-new cars, you don’t have to worry about an old banger that’s likely to need a lot of repair.


You won’t own the car during the contract period (though this is the same for almost all dealer finance agreements) – and will only own it at the end if you pay the balloon payment.

If the predicted minimum future value is set very close to the actual value of the car you will have little equity to roll onto another deal. If there isn’t any, you will have to get your hands on a deposit for a replacement car elsewhere.

Extra charges of 7-10p per mile if you go over the agreed set mileage.

The future value is based on keeping the car in good condition. You’ll be charged extra to put right anything that’s not down to normal wear and tear.