Alternatives To PCP Finance

We have often discussed the main benefits of a Personal Contract Purchase/Personal Contract Plan (PCP) agreement, but it is far from the only option when it comes to car, motorbike, van, or even campervan finance. Indeed, there are a number of strong finance alternatives that are well worth considering, and so in this article we have decided to provide a brief insight into each of these, beginning with Personal Contract Hire, or PCH.

A PCH differs from a PCP in that it’s a hire plan allowing for the car to be hired rather than bought. This will result in you paying less money on a monthly basis, since you’re not paying to purchase the vehicle, and once the agreement comes to an end (which can range from one year to five, depending on your preferences), you will not own the car, and you will move onto another PCH plan for a different vehicle. Of course, if you did wish to buy the car, then you can still do this, but under another finance plan.

The main benefit of this is that, if you happened to enter an agreement for a car you weren’t a major fan of once you became accustomed to it, then you would not be locked down into having to buy the car. What’s more, your vehicle will always be fresh, since a PCH plan would necessitate changing cars every few years, which would also allow you to experiment with all sorts of ranges, sizes and manufacturers. And of course, there is the financial saving that you would make, with the monthly payments and overall costs greatly reduced due to the fact that you are only hiring the car rather than buying it completely.

As for the other strong alternatives aside from a Personal Contract Hire: there is also a Hire Purchase, also known as a HP. The main difference between this and a PCH concerns the pre-agreement deposit and the fixed interest rate, which will reduce the monthly payment costs and allow you to own the car at the end of the deal. In addition, there is a Personal Loan, also called PL car finance. This is generally handled via your bank, your building society or a finance company, and it consists of a loan that you will take out in order to buy a car, along with a reduce initial deposit payment.

So, there are several alternatives to the traditional Personal Contract Purchase when it comes to car finance, and hopefully we have provided a strong insight for you on the likes of Personal Contract Hire, which will prove extremely useful when the time comes for you to buy your next car. In a nutshell, PCP finance offers a quick & usually flawed solution to and it is an easier and quicker way of acquiring a car. However, there are several risks involved that hence why it’s best to consider alternative car finance options before deciding which option you wish to explore.

Read more about PCP alternatives on our news page.

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