PCP can be a very attractive alternative to buying, although it’s not for everyone. Your choice depends on how important certain benefits are to you. To help make your choice, we have listed below the benefits of PCP compared to conventional car finance options.
PCP Means Lower Monthly Payments
Because you only pay for the portion of the vehicle that you actually use, your monthly PCP payments are significantly lower than loan repayments for the same duration.
PCP Means More Car, More Often
With lower monthly payments, you get more vehicle for your money. Plus you can change your vehicle every 2, 3, 4 or 5 years depending on the duration of your contract.
PCP Means Lower Initial Cash Outlay
The initial payment on a PCP vehicle can be as little as one monthly payment (subject to terms). This makes acquiring a vehicle more affordable and frees up your cash for other things.
No Vehicle Disposal Worries
With PCP the need to dispose of your used vehicle is eliminated. At the end of the contract you simply return the vehicle without any further financial commitment, unless you decide to buy it of course.
No Depreciation Worries
The biggest single cost of owning a car is depreciation – the difference between the purchase price and the value when you come to sell.
Recent years, have seen a major fall in used car values and many car owners have been shocked at how little their cars are worth. With PCP, depreciation is the responsibility of the funding company.
Guaranteed Future Value (GFV)
The funding company estimates how much your vehicle will be worth at the end of the contract and this figure is written in to your PCP contract as the Guaranteed Future Value (GFV).
This gives you three options at the end of the contract
- Pay the GFV to purchase the vehicle outright
- If the vehicle is worth more than the GFV, dispose of it and retain the surplus or use it as an initial payment for your next vehicle
- If the car is worth less than the GFV simply return it without any further financial commitment
Fixed Cost Motoring
Your monthly payment is set for the duration of the contract. If you include our full maintenance option, you’ll know your motoring costs for years ahead.
Lower Capital Costs
Because PHVC and our Partners buy hundreds or even thousands of cars every year, the prices we pay are always significantly lower. However, regardless of the purchase price, the car’s future value in 2, 3, 4 or 5 years will be the same. Consequently a PCP vehicle will incur less depreciation, which in turn will be reflected in a lower monthly payment.