What is Personal Contract Purchase (PCP)?
A PCP agreement allows you to keep your monthly payments lower by deferring a significant proportion of credit to the final payment at the end of the agreement.
PCP gives you a number of options at the end of the agreement and provides a guaranteed future value (GFV) for your vehicle if you choose to return it.
PCP is a great flexible payment option which can help you buy your next car, 4x4, motorcycle or scooter. Available on new and used vehicles, you can choose the deposit, term, annual mileage and final lump sum repayment to suit your budget.
Your Black Horse dealer will help you find the type of vehicle you'd like. You can borrow any amount from £1,000 for new and used vehicles. You can agree a deposit together, discuss how many miles you are likely to travel each year as well as how long you want the agreement to run for (between 1 and 4 years). Your dealer will then calculate your GFV and confirm your monthly payment. Subject to your application being approved you can drive your new vehicle away.
At the end of the agreement, you will have four options:
- Make the final lump sum payment and become the owner of the vehicle.
- Part exchange the vehicle, subject to settlement of your existing finance agreement. New finance agreements are subject to status.
- Return the vehicle and not pay the final lump sum payment. If the vehicle is in good condition* and has not exceeded the agreed maximum mileage, you will have nothing further to pay. If the vehicle has exceeded the agreed maximum mileage, a charge for excess mileage will apply.
- Apply to re-finance the final lump sum payment, subject to status.
*For more information on what is considered good condition please see:
An initial deposit
When you're starting out, you will need to agree an initial deposit. Flexible deposit options are available. 0% deposit may be available, subject to status.
Your monthly payments
Your monthly payments will be set at a fixed interest rate.
Final lump sum payment
At the end of the agreement you need to pay the final lump sum payment unless you decide to hand the vehicle back.
How long do you have to pay it?
The term of your finance agreement will be based on what you decide with your Black Horse dealer. Repayment terms are available from 1 to 4 years.
Can I own the vehicle?
Once you have paid the final lump sum payment (including fees) you will own your vehicle outright.
This finance option is seen as a flexible way to finance vehicles. A significant proportion of the credit is deferred until the end of the agreement. You should prepare for this if you want to own the car.
Here's what else you need to think about:
- You won't own the vehicle until the final lump sum payment (including fees) has been made.
- If you do not keep up repayments, there is a chance your vehicle may be repossessed.
- If you choose to hand the vehicle back and you have exceeded the agreed annual mileage, an excess mileage charge will apply.
- You need fully comprehensive insurance at all times – that's because the vehicle belongs to Black Horse for the duration of the agreement and it's part of our terms and conditions while you're driving it.
Familiarise yourself with the Good Condition Guide:
Cars good condition guide - www.blackhorseoffshore.co.uk/goodconditionguide
Motorbikes good condition guide - www.blackhorseoffshore.co.uk/Bikeconditionguide
- A personal guarantee may be required.
With PCP, having the option of lower payments may mean you can afford a newer vehicle. It also gives you greater flexibility over how you pay for the vehicle of your choice and provides a guaranteed future value for your vehicle.
Greater flexibility for you
You have 4 options at the end of the agreement, meaning you don’t need to make a decision on this when you choose the vehicle. With PCP you’ve got more options at the end of the agreement, so it’s worth considering PCP if you think your circumstances might change or you want greater flexibility.
Get closer to the vehicle of your choice. Simply visit your local Black Horse dealership today.