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What is Personal Contract Purchase (PCP)?
Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or a used car. It is similar to a Hire Purchase agreement as you will usually pay an initial deposit, followed by monthly instalments over a term typically between 18 to 48 months.What makes PCP different to Hire Purchase (HP) is that your monthly instalments are paying off the depreciation of the car, and not its entire value, over the course of the term.

What are the advantages of PCP?

PCP agreements tend to be more favourable for individuals looking for smaller monthly payments. By deferring part of the cost of buying your car to a balloon payment at the end, the monthly payments are reduced. The other big advantage is that at the end of the agreement, you have three options. You can retain the vehicle and pay the balance owed, return the vehicle (subject to terms and conditions), or renew the agreement for a new car. This flexibility often makes PCP finance very appealing. If you want some time to consider your finance options but don’t want to miss out on your ideal car, you can use our handy online reservation system to secure the vehicle while you decide.

What should you consider when opting for PCP?

The most important factor when considering PCP is making sure you can pay the final balloon payment which is outlined in your agreement. You will also have agreed your mileage and should you exceed that mileage, you may incur additional charges before the vehicle can be yours. Also, you can’t sell the car without settling the finance agreement. If you’re not sure whether PCP is the right option for you, you can reserve your vehicle with our buy online function while you decide. Plus you can speak to one of our experienced advisors who will help you find the right finance product.

Can I settle my PCP agreement early?

Yes, it is possible to end a PCP agreement early. However, additional charges and fees may apply. As with any finance agreement, the contract will state the specific terms for ending the contract early. To obtain an accurate settlement figure for ending your PCP agreement early, you will need to speak to the agreement provider.

What is Hire Purchase (HP)?
​Hire Purchase is a way to finance buying a new or used car. You will normally pay an initial deposit and will pay off the entire value of the car in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the car outright. ​

What are the advantages of HP?

The main advantage of an HP agreement is that as soon as you make your last payment, you will own your car outright. Also, unlike PCP agreements, estimated mileage is not a condition of the agreement and therefore you won’t be faced with any excess mileage charges.

Don’t forget that Yeomans’ buy online feature makes the whole car buying process really quick and simple. You can use our reservation system to secure the car you want while you decide on your finance choices and you can even use our free credit checker to see whether you might be accepted without affecting your credit score.

What should you consider when opting for HP?

The first thing you need to know about HP agreements is that you won’t own the car until all of the payments are made. Therefore you won’t be able to sell the car without settling the finance and the agreement conditions state that the car must be properly insured and well maintained throughout. Monthly payments can also be slightly higher than other financial products because you will be paying off the full value of the car.

If you’ve found the ideal car with Yeomans but need time to decide how to finance it, you can use our online reservation system to hold the car until you are ready to complete your purchase.

Can I settle my HP agreement early?

Yes, it is possible to end an HP agreement early but the terms of each agreement may vary so it is important to refer to your contract. The further you are into your agreement term, the more options you have for settling it early. Early settlement fees may apply. If you need any help or advice, please contact the team at Yeomans.

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