A PCP (Personal Contract Purchase/Personal Contract Plan) is a loan that will help you to buy a car, one that will not require you to pay off the full value of the vehicle, and unless you choose to do so, you officially won’t own the car once the agreement has come to an end. It has proven to be very popular with motorists and is an option that requires genuine consideration from the would-be driver, especially those who are buying a car for the first time. Here, we will explain the appeal of a PCP by listing several key benefits.
To begin with, a PCP is eye-catching for consumers because it provides an easy entry point with added incentives. Different bonuses are put into place for a PCP agreement depending on your own circumstances. They can be discounts from the dealership which reduce the overall cost, they can be offers in conjunction with another organisation (perhaps one related to entertainment, such as a reduction on movie tickets or a short holiday break), or they can be important to your everyday needs, one example being costs related to childcare. Those offering car finance deals will be looking to help you get over the line with regards to a purchase, and these extra incentives are designed to turn you from an interested party into a full-fledged customer.
Next, because of the terms and conditions of a PCP agreement, the fixed monthly rate is cheaper than that of a Hire Purchase (HP). In the case of the latter, you pay an initial deposit and then pay off the rest of the car in monthly instalments, and you end up owning the vehicle once the payments have ended. But because you won’t own the motor once the PCP contract comes to an end, the overall costs are significantly decreased as a result. The HP assumes that you want full ownership of the car in the long-run. That isn’t the case for a PCP, and so the reduced monthly payments are a key factor in drivers opting for this finance plan.
Finally, the PCP will also include a warranty, which generally covers the immediate three-year period that follows a purchase. Translated, this means that if the car happens to suffer any malfunctions beyond your control, or if the car is simply not up to scratch, you will be able to go back to the dealer and/or the manufacturer, and they will be responsible for repairing or even replacing the vehicle at no extra cost to you. Obviously, if you happen to incur any accidents of your own volition, this will not apply. But assuming that there are faults with the vehicle that have nothing to do with you, you will be safe in the knowledge that the car will be fixed or changed without you having to pay an extra penny. In addition, the terms of the original PCP agreement may be altered to your further benefit, since the car that you had previously signed on the dotted line to buy is no longer in the same condition as it had been previously, or is completely different altogether in the case of a full replacement.
These are just some of the benefits of a PCP agreement, but you can find out further information about car finance mis-selling or PCP mis-selling by visiting this our news page www.pcpmissold.co.uk.