Personal Contract Purchase (PCP) | Chorley Group

Personal Contract Purchase (PCP)

A popular method of financing your car, pay monthly with the option to buy the vehicle at the end of the agreement.

PCP allows you to take out finance for a new or used car on fixed monthly payments with numerous options at the end of the contract. At the start of the contract we will work with you what terms of the agreement including length of agreement and annual mileage. A vehicle's value decreases with age, usage and damage - to cover the depreciation of the car a Guaranteed Future Value (GFV) is estimated. The GFV is what the cars expected value will be once your PCP contract ends.

The monthly payments are therefore calculated to cover the depreciation cost for the car from when you take control of it to when you hand it back. More annual mileage increases the monthly costs as the GFV of the vehicle will decrease for every extra mile on the clock.

Once your monthly payments are finished, you’ll have three options:


Pay the GFV 'balloon payment' and keep the car


Hand the car back with no further payments


Part exchange the vehicle for a new vehicle lease

Personal Contract Purchase (PCP) Benefits

A Personal Contract Purchase ownership is designed again for the private motorist method of funding that allows you to run your own car on similar basis as company contract without having pay tax.

  • The most affordable way to drive brand new vehicles every 2-4 years with all the latest technology and monthly payments on a car financed by PCP are usually lower than if your car is financed by a Hire Purchase agreement.
  • If you decide not to buy the car, you can simply walk away when you've made all the monthly payments.
  • Similar to PCH, you can drive away a brand new car every three years without worrying about it running out of warranty, or selling it on.
  • If your car is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new car.

Do I qualify for Personal Contract Purchase leasing?

To be eligible for contract hire leasing on a vehicle you must be at least 18 years of age with a full UK driving licences. A decent credit rating is also required for all finance agreements.

What happens at the end of the lease?

At the end of the PCP agreement you have three options; pay the GFV 'balloon payment' and keep the car, exchange the car for a new vehicle or hand the vehicle back to the leasing provider with no further obligations on the vehicle. If you choose the hand the vehicle back and have exceeded the agreed annual mileage you will be liable to pay for each mile over the agreed total. The condition of the vehicle will be assessed according to the BVRLA (British Vehicle Rental and Leasing Association) Fair Wear and Tear guidelines. Any damage outside the BVRLA guides may be subject to end-of-lease penalty charges.

Contact one of our Chorley Group dealerships today to learn more about Personal Contract Purchase and other finance options available.

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Personal Contract Purchase Finance Example:

PCP Finance agreements may look complicated at first glance, but they are one of the easiest and straight forward ways of financing your new car with more decisions available at the end of the deal.

Cash Price £16,471.61 The price to buy the vehicle outright without finance
Customer Deposit £199.00 The upfront deposit cost the customer pays at the start of the contract.
Finance Deposit Contribution £3,250.00 The deposit contribution from the manufacturer/Chorley Group. This is essentially the amount discounted off the original deposit cost.
Total Deposit £3,449.00 The customer deposit and the deposit contribution added together.
48 Monthly Payments of£199.99 The length of the contract and the agreed fixed monthly payments for the duration of the agreement.
Amount Financed £13,022.61 The amount of finance you will receive to cover the costs of the vehicle, paid back through the monthly payments.
Final Optional Payment (GFV) £5,320.53 This the predicted future value of the vehicle once you reach the end of the contract. When the term is up, this is how much it will cost to buy and keep the vehicle. It is often referred to as a 'balloon payment'.
Total Amount Payable £18,321.53 The total amount paid to keep the car on the PCP contract. The total deposit, all the monthly payments and the GFV added together.
APR Representative 4.99% 4.99%
Annual Mileage 6,000 The amount of miles you can use the vehicle for per year. The annual mileage is decided at the start of the contract. Mileage exceeding the agreed amount will result in additional charges at the end of the contract.
Pay off the entire value of your car with an initial deposit and fixed monthly payments
Lease your car over an agreed period of time with fixed monthly payments and hand the car back at the end
Equip your fleet with an initial deposit followed by the agreed fixed monthly payments
Lease Purchase is very similar to Hire Purchase but has a deferred (balloon) payment at the end of the contract
More options at the end of a leasing agreement, including the choice to retain the vehicle used during the lease