PERSONAL CONTRACT PURCHASE
Car leasing has numerous advantages over buying a car outright, but it also has one major drawback – the car is never yours. So what if you could combine all the advantages of a regular car leasing deal, but also have the option to own the vehicle outright?
Well you can, thanks to a process known as personal contract purchase (PCP). Personal contract purchase agreements are growing in popularity and are actually a straightforward method of car finance.
Broadly, personal contract purchase is the same as a personal contract hire agreement – but with one key difference.
At the end of the contract, there is an optional balloon payment that the individual can choose to pay in order to take ownership of the vehicle. This amount is determined at the outset and allows the driver to keep the vehicle if they are happy with it. However, it is not essential – on the contrary, as with a personal contract hire deal, you could choose to return the car to the leasing company and walk away.
BENEFITS OF PERSONAL CONTRACT PURCHASE (PCP)
ᐅ Fixed prices – You know exactly what you have to pay each month, which can help you budget.
ᐅ Initial down-payment – Only a small deposit is required.
ᐅ Option to defer payments – If you include a balloon payment at the end of the term, you can defer payments.
ᐅ Refinance – If you prefer, you can refinance the balloon payment at the end of the term.
ᐅ Maintenance packages – Most personal contract purchase agreements will include maintenance packages that can range from basic servicing to total vehicle management.
ᐅ No depreciation concerns – It’s not necessary to buy the car at the end of the term and so you can still choose to walk away without re-sale concerns.
ᐅ Access to more ‘upmarket’ vehicles – One of the key elements of a personal contract purchase deal is that it gives you access to previously unaffordable vehicles due to the low deposit and low monthly payments.
ALTERNATIVE PERSONAL LEASING OPTIONS
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