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What is pcp car finance: Frequently Asked Questions

what is pcp car finance

Purchasing a car can be a significant financial commitment, but various financing options are available to make this process more manageable. PCP, or Personal Contract Purchase, is one option that has gained popularity among car buyers. Here, we will address frequently asked questions about what is pcp car finance, to help you understand its intricacies. 

What is pcp car finance?

PCP is a type of car finance that allows individuals to spread the cost of a vehicle over a fixed period. It involves paying lower monthly instalments compared to other financing methods because the borrower does not have to pay off the car’s entire value. Instead, they cover the vehicle’s depreciation during the contract period and have three choices at the end. 

How does PCP work?

PCP typically consists of an initial deposit, followed by monthly payments over a set term, which typically lasts 18 to 48 months. The monthly payments cover only part of the value of the car at the time of purchase, not its total value. At the end of the agreement, the borrower has three options:

Return the Car: Hand back the car to the finance provider, given that the vehicle is in good condition and has not exceeded the agreed-upon mileage.

Balloon Payment: Pay the pre-agreed optional final payment, which is known as a balloon payment. In which you are then able to own the vehicle outright.

Trade-in or Renew: Part-exchange the vehicle for a new one and begin a new PCP agreement.

What are the Advantages of PCP?

There are several advantages to using PCP car finance, including:

Lower Monthly Payments: PCP often offers lower monthly payments compared to other finance options like Hire Purchase or loans.

Flexibility: At the end of the agreement, borrowers have choices: return the car, purchase it outright, or renew the agreement for a new vehicle.

Fixed Interest Rates: The interest rates are usually fixed, allowing borrowers to budget effectively as the monthly payments remain constant throughout the term.

Who is PCP suitable for?

PCP can be suitable for individuals who prefer lower monthly payments, regularly change their vehicles, and enjoy having options at the end of the term. It’s also ideal for those who wish to drive newer or higher-value cars without committing to purchasing them outright. PCP stands for Personal Contract Purchase. This is also the same concept of Lease Purchase with a different wording. 

Find out more about What is pcp car finance today

Understanding the intricacies about what is pcp car finance, empowers buyers to make informed decisions when considering this method to fund their vehicle purchase. You should always seek advice from financial experts here at Streamline Car Finance, we can determine if PCP aligns with your specific needs and financial circumstances.

Applying for car finance is easy with Streamline. Simply fill out our online application form or give us a call on 0161 968 3434 or 07746696156.

To get a quote apply here, for any questions or further information please call 0161 968 3449
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STREAMLINE CAR FINANCE LTD. Registered in England and Wales. Company Registration Number: 14504140.

Company Registered Office Address: Trinity House, 114 Northenden Road, Sale, Manchester, M33 3HD

Streamline Car Finance is a credit broker, not a lender.

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We are authorised and regulated by the Financial Conduct Authority, registration number 988683. We can introduce your application to car finance providers based on your credit rating. We will receive a commissions for such introductions, This will not impact the rate, amount or acceptance you are provided and is a fixed payment but may vary by lender. You can request details at any time. All finance is subject to status and income.

Applicants must be 18 or over, terms and conditions apply.

No deposit required* subject to full credit checks and lender criteria.

We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your account manager can provide more information on this.

Please refer any complaint verbal or written to the Complaints Manager at the earliest opportunity. This can be done via telephone, email, or any other appropriate means of communication. (info@streamlinecarfinance.co.uk)


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