A Personal Contract Plan (PCP) is effectively a car rental agreement which gives you the option to buy the car outright at the end of the contract. As different PCPs offer different things, here's our guide to the pros and cons of buying with a Personal Contract Plan...
The pros
One of the main benefits of a Personal Contract Plan are the low monthly repayments. Similar to a rental agreement, you initially pay a deposit, followed by monthly instalments for the remaining term of the contract. This results in smaller, manageable repayments – so you could drive a brand new car off the forecourt which you couldn’t otherwise afford to do so. For peace of mind, many PCP schemes also include servicing and maintenance, too. This takes the hassle out of ownership – leaving you time to enjoy yourself on the road.
Smaller monthly repayments
Increases your potential budget
Servicing and maintenance often included
The cons
At the end of the Personal Contract Plan, you have three options: to buy the car outright for a pre-agreed - often excessive - price; to leave the agreement and walk away with nothing; or to enter another PCP and get an alternative car. Therefore, the dealer has the upper hand, as you never actually own the car and at the end of the agreement you are left with nothing (unless, of course, you opt to purchase it). Furthermore, you could incur hefty penalties if you exit the PCP early or exceed the maximum mileage allowance.
Less freedom - you are committed to a strict contract
You do not own the car outright during the contract
Hefty penalties for early termination or exceeding mileage quotas
Why buy Approved Used? Why buy new?
