Personal Contract Purchase

Confused.com and CarFinance 247

We've partnered with CarFinance 247 to find you their best deal from a range of car finance lenders. Their service is free to use and getting a quote won't impact your credit score. A hard search only happens when you apply for a deal.

If you've already found your next car and just need the finance deal, they can help set it up for you. If you're still looking for your dream car, their car search gives you access to over 130,000 cars from across their trusted dealer network.

Once you’ve requested a quote, you will get a call back from one of CarFinance 247's account managers to discuss it in more detail. Alternatively, you can arrange to have them call you at a more convenient time.

Carfinance 247 searches their panel of trusted lenders to present you with a quote over the phone with the best overall value. However, account managers will also discuss alternative options over the telephone.  

Please note, car finance options discussed will depend on lenders checks and whether your chosen car meets their criteria.

CarFinance 247 customers rate them 4.7/5 on Trustpilot*.

*Correct as of November 2022

How does PCP work?

There are three main stages to PCP car finance:

• Put down a deposit at the beginning of the PCP deal. This is typically 10% of the car’s value, which means you’ll owe 90% of the car’s value at the start of the contract.
• Make monthly payments to pay off the depreciation on the car, which is the difference between what you owe at the start of the PCP agreement and what the dealer believed the car would be worth at the end. The latter is known as the "guaranteed minimum future value." While you’re making your monthly payments, you’re effectively only leasing the car from the finance company.
• The end of the PCP agreement is when you either give the car back or buy it. You could get a new PCP agreement by returning your current car and replacing it with a brand-new model. To keep the car, you'll need to make a balloon payment. This covers the amount the dealer estimates the car would be worth at the end of the deal. Some finance companies charge an admin fee if you buy your car at the end of the PCP contract.

What other types of finance are available?

When it comes to paying for a new car, there are various car finance options, so most people will be able to find something that suits their needs.

Here are some of the main alternatives to personal contract purchase:

Hire purchase (HP) usually involves paying a deposit of 10% of the car’s value at the start of the contract. You must then make monthly payments for the term of the HP contract, which typically lasts 3 to 5 years. There’s no balloon payment at the end of the agreement – you’ll own the car once you’ve made the final monthly payment.

Personal contract hire (PCH) is an agreement to lease the car. You’ll pay a deposit followed by monthly payments. At the end of the PCH contract term, you’ll give back the car. As long as you don’t exceed a given mileage level, maintenance and servicing are usually included.

Personal loans are also an option. You could take out a loan to buy the car and you’ll be the owner of the car as soon as you hand over the money to the seller. If you choose a longer loan term, you’ll pay more in interest.

How do I get cheap personal contract purchase deals?

Here are some ways you could make a personal contract purchase cheaper:

• A higher initial deposit will lower your monthly payments
• Choose a longer PCP agreement term to hopefully reduce your monthly payments. This could also mean you’ll pay more in interest
• Look at the interest rate over the term of your personal contract purchase deal – a lower interest rate means lower monthly payments
• Set the annual mileage allowance at the right level as you’ll be charged more if you exceed it
• Take care of the car – you’ll have to pay for any deterioration or damage that’s not “fair usage” should you want to hand back the car at the end of the PCP agreement

How do I find a PCP deal?

To see if you could be offered a PCP finance quote, you'll just need to have these details ready:

• How much you need to borrow to buy the car
• Your personal details, including occupation
• Your monthly income before tax

Once you've requested a quote, one of Carfinance 247’s account managers will call you to discuss it in more detail. Alternatively, you can schedule a call at a time that’s more convenient for you.

Please note, car finance options discussed will depend on lenders checks and whether your chosen car meets their criteria. If a lender does offer a PCP loan as an option then this will be discussed over the phone with an account manager.