Getting a good PCP Finance Deal on Used Cars

PCP is an acronym for Personal Contract Purchase or Personal Contract Plan

Buying a used car under PCP

PCP finance is also available for buying used cars. Similar to other cars, buying a used car under PCP involves a deposit, initial fees, fixed monthly installments, mileage restrictions and GMFV.

Let's look at a couple of examples at how buying a used car under PCP is different from buying the same car under HP (hire purchase) method.

Example: 1

Let's take a Volkswagen Polo 1.2 S, 2011 model -- priced at £9,000.


Under HP, you will have to pay a deposit of £1,000. The monthly installment is £194 for 48 months. The initial payment is one month's installment of £194. Final payment is £293.73 with an option-to-purchase fee of £99. The total amount payable is £10,446, including all the costs mentioned above and adding an acceptance fee of £199. The actual interest rate charged is 3.50%.


If you purchase the same car under PCP, the monthly installment will be £139 for 48 months, which is lower when compared to HP. The final payment is £3,169 resulting in a total amount payable of £10,869. So, in case you want to purchase the car at the end of the term, the total amount is around 4% higher than the total amount payable for HP. However, you can choose not to buy this particular car and take this amount either as cash or use it as a deposit for the next car. Note that interest rate on PCP is higher at 6.58%.

Example 2:

Let's take another example of an Audi UDI A3 1.6 TDI SE, 2013 model. It has a price of £15,760.


Similar to the above example the deposit is the same for both HP and PCP (£1,000.) Under HP, the monthly payments are £355 for 48 months. Final payment is £454. Other costs include an initial payment of £355 (one month's installment), an acceptance fee of £199, and an option-to-purchase fee of £99. The total amount payable is £18,152. Interest rate is 3.50%.


Under PCP, the monthly payment for this car will be around £252. PCP will also include other charges such as an initial payment of one month's installment and an acceptance fee of £149. Option to purchase fee is £199, which is higher than what is payable under HP. The final payment (GMFV) will be £5,824 or significantly higher than what is payable under HP. However, again this sum needs to be paid only if you want to purchase the same car. Otherwise, you can use this amount as a deposit for your next car. Interest rate is at 6.58%. Total amount payable is £18,916, which is again 4% higher than the comparable HP amount.

Based on both examples, let's look at some of the factors that one needs to consider when buying a used car under PCP.

  • Like any other PCP deal, you need to pay a deposit, an initial payment, and acceptance fee.
  • If you want to purchase the car at the end of the term, you need to be prepared to pay a GMFV.
  • You can use the GMFV amount to buy another new or used car.
  • If you end up purchasing a car under PCP, you will be paying a higher total amount than what you would have paid under HP.
  • Interest rate on PCP is higher in comparison to HP.
  • Option-to-purchase fee is higher in PCP.

PCP Loan Calculator

You can calculate your monthly PCP payment using the PCP loan calculator.

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