Glossary
PCP (Personal Contract Purchase)
PCP (Personal Contract Purchase) is a vehicle finance agreement with lower monthly payments than a loan, ending in an optional final "balloon" payment to own the car outright.
PCP is one of the most common ways UK car buyers finance a vehicle. Monthly payments only cover the depreciation over the agreement term, not the full vehicle value, which keeps payments lower than a typical loan. At the end of the term, the customer can pay a final "balloon" payment to keep the car, hand it back, or part-exchange it.
Related terms