Personal Contract Purchase

A Personal Contract Purchase is a flexible and popular choice, as you can keep your monthly repayments lower by deferring a significant proportion of the amount of credit to the final payment at the end of the agreement. This means you may be able to afford a better vehicle than you thought possible.

At the start of the agreement the finance company sets a guaranteed future value (GFV) for your vehicle. You pay a deposit and then make the monthly repayments on the balance of the loan, plus the interest charges, minus the guaranteed future value. At the end of the agreement you have three options:

  1. Pay the guaranteed future value and the vehicle is yours, or
  2. Hand back the vehicle with nothing more to pay, or
  3. Part exchange the vehicle and use any equity as a deposit on your next vehicle.

This product is ideal if you:

  • Want the choice to purchase a more expensive vehicle with a lower monthly payment than a traditional hire purchase agreement.
  • Like to change your vehicle frequently and drive the latest models.
  • Want to budget and stick to a fixed monthly amount, as your repayments will be fixed for the term of your agreement.
  • Want a guaranteed future value for your vehicle at the end of the agreement.
  • Are looking for a new or used vehicle, as the product is applicable to both.
  • Think you may want to settle your agreement early and part exchange the vehicle for a newer model.

Things you need to know:

  • A significant proportion of the credit is deferred to the end of the agreement, so you should budget for this if you want to own the vehicle.
  • You set your expected annual mileage and this affects your monthly repayments and also the guaranteed future value. If you go over the expected mileage then excess charges will apply.
  • Additional charges will also apply if you hand back the vehicle in a poor condition.
  • You cannot sell or give the vehicle away until you have made all repayments under the agreement.
  • Your vehicle is at risk of repossession if you do not make the contractual repayments.

And finally...

  • You must be at least 18 years of age to apply.
  • You must have fully comprehensive insurance.
  • You must be the registered keeper of the vehicle and keep it in your possession for the term of the agreement. You cannot obtain motor finance in your name for someone else.