How to cut your car costs with a 48-month PCP deal

  • Reduce monthly payments with longer-term contract
  • Pay less than the list price with some 48-month deals
  • Get a pricier model within budget by spreading the cost

If you’re looking to slash your monthly costs – or get more car for your budget – spreading PCP payments over a longer period than the default 36 months could be the way to do it. However, to make sure that you’re not paying a large premium for the privilege of having more time to pay off the car, there are several things to watch out for.

These include APR rates – as the amount of interest you have to stump up rises every month – and the total amount payable, both if you buy the car or hand it back when the scheme ends. Find a low-interest offer, though, and spreading payments over a longer period could be the perfect way to get the car you want for less than you think.

Search for zero-percent APR, 48-month deals

If you’re concerned about the total price you pay as well as how big your monthly payments are, look out for longer-term zero-percent APR offerings – as these let you pay a smaller amount every month without paying any extra in interest. 

Alfa Romeo offers zero-percent APR on the Mito TwinAir supermini, with the standard term being 48 months*. Best of all, drivers can benefit from a substantial discount of around £1,600 in addition to four years’ interest-free credit. As a result, monthly payments are low at just £169, while the deposit is a reasonable £1,235.

Jeep is also currently offering 48-month zero-interest deals on its Cherokee off-roader – along with a substantial list price saving of £2,750*. This means that monthly payments of just £399 will net you the Cherokee (if you put down a £7,699 deposit), despite its list price of more than £37,000.

Save £34 per month on a Mini Cooper with a 48-month PCP

Looking for a stylish, practical hatchback? Monthly payments of £265 can get you the keys to a five-door Mini Cooper on a 36-month PCP (with no deposit)*. Increase this to a 48-month term, however, and monthly payments drop by £34 to £231 per month – which could make the difference between affordable and unaffordable.

Be aware, though, that if you choose to buy the car at the end of the 48-month scheme you will have paid an extra £531 than with the 36-month plan, due to the 5.9 percent APR rate. If this is the car you want, however, spreading the cost over 48 months could be the easiest way to fit it into your monthly budget.

Watch out for high APR rates

The higher the interest rate with finance, the more it will set you back overall. Similarly, the longer the PCP term, the more interest you’ll have to pay – as the interest racks up over a longer time. So it’s worth being wary of longer-term PCP deals with high interest rates; even a rate of less than five percent can potentially add thousands to the total bill.

Take Land Rover's Discovery Sport SUV, which costs £44 less per month by spreading the cost over 48 months rather than 36. Thanks to a relatively high 6.9 percent APR rate, however, it’ll also cost you an extra £1,144 with the 48-month set-up – should you put down a £3,000 deposit and buy the car outright at the end of the scheme*.

Be aware of interest rates that jump with longer finance terms

The story gets worse with brands that bump up the APR rate if you choose to pay over a longer term. Some finance deals will bump the interest rate with an extended loan period, meaning you could end up paying more by spreading the costs over 48 months. However, even if the interest rate does not change at all, not all longer-term offerings will offer good value.

Volkswagen will charge you exactly the same monthly cost, whether you get a Golf on a 24-month PCP term or a 48-month term*. Therefore, if you don’t plan on buying the car, there is no incentive to spread costs over a longer period. Should you want to buy the car, however, opt for the 48-month set-up and there’ll be less to pay to buy the car outright at the end of the scheme, and more time to save up.

If you’re looking for more time to pay off the cost of your car, there are other finance options, including loans. Take a look at our finance calculator to see what you could afford to borrow.

Want to find out more about car finance? Read the articles below:

Calculating car finance: how to get the sums right

Zero-deposit car finance that could save you money

Car finance: which option is right for you?

Top cars that are cheaper on finance than paying cash

How to buy a high-end car for a low-end budget

Finance terms: *Deals are correct at time of publication. Everyone’s financial circumstances are different and credit is not always available – Parkers cannot recommend a deal for you specifically. These deals are indicative examples of some packages available this week.