PCP Finance Explained

A highly popular form of used car finance, you’ve no doubt heard of PCP before. Short for personal contract purchase, PCP’s are highly popular thanks to the level of flexibility they can afford a consumer.

When signing up to PCP finance plan you’ll most likely pay an initial deposit this is then subsequently followed by fixed monthly payments. However, you won’t automatically become the owner of the car when your finance term comes to an end. At this stage, you’ll most likely have two options. Either the car is returned to the dealer or finance company or alternatively, you’ll be able to pay a balloon payment at the end of your term to purchase the car outright.

The amount you pay over the course of a PCP term is dedicated by several factors. These include deposit, cost of the used car, interest rate, and the lenders expected value of the car at the completion of the finance term, also known as Guaranteed Minimum Future Value or GMFV.

Monthly payments on PCP will most likely be less than an HP deal, however, be aware that mileage limits apply. If you were to exceed the mileage stated in your term, expect to incur financial penalties.

If you are a careful driver that likes to take care of your car, you driver relatively small miles and like to frequently change your cars, say every three years, then a PCP finance plan for your used car could well be the way forward.

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Transport For London

Cars need to meet minimum emission standards when travelling in the Ultra Low Emission Zone (ULEZ) or the daily charge must be paid.

Minimum emission standards

Petrol: Euro 4
Diesel: Euro 6

The ULEZ will be enforced based on the declared emissions of the vehicle rather than the age. However:

Information from Transport For London

Check this car on the TFL website before purchasing: https://tfl.gov.uk/modes/driving/ultra-low-emission-zone/vrm-checker-ulez

SW Car Supermarket

To save timely negotiation all our cars are heavily discounted upfront and offered nearer cost price, saving customers up to £2000 when compared to our competition. This ensures we are treating every customer the same. This fee is a compulsory fee and applies to all customers.

Variable admin fee is charged as listed below:

  1. Retail customers pay £149.
  2. Repeat customers purchasing a 2nd car within 12 months of the original invoice date £0.
  3. Retail customers arranging finance using brokers outside of our immediate panel of lenders £399.
  4. Trade customers making a purchase as the motor trade £499.
  5. Export customers including Northern Ireland and the Republic of Ireland £499.
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