Go for PCP if you say yes to one or more of these returns: you want lower monthly repayments; You like the flexibility of the options at the end of the agreement; You can name your mileage safely and accurately. Many dealers offer personnel contract plans (PCPs) as an option to pay for a car. PCPs may seem very attractive because they usually have low monthly repayments. You also have the convenience of being able to sort your finances and choose your car in the same place. HOWEVER, PCPs are very complex compared to other types of auto financing and it is important to understand all the conditions before you sign up. A lease-sale contract looks like a PCP contract, even if you can`t return the car. So we used Admiral`s auto financing calculator to compare costs between the most popular methods of financing a car, which are a PCP contract, an HP contract and a personal loan. The most obvious attraction of PCP is the size of the monthly payment. “Under a PCP, you finance the depreciation of a car, not the total price, so the monthly costs are reduced,” says Adrian Dally, FLA`s engine finance director. According to buyacar, if you paid half the amount owed under the lease, you owe nothing if you terminate your contract prematurely.
As with other types of credit, your financial firm sends details of the repayments you make to a reference credit agency when you conclude a PCP. Learn more about the information in your credit history. But you need to make sure that the agreement you sign up for is right for you, so check the amount of interest you will have to pay, over what period and if there is a better offer elsewhere. However, don`t fix on the rate or monthly repayments; Look at the total amount you need to pay back to figure out exactly how much you will cost financing merchants, and compare these long-term costs with all the deals you can find elsewhere. HP grants you additional rights to a private loan and is only available through distributors who have gone through the rigorous approval process of financial firms.