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PCP Advantages and Disadvantages

Personal Contract Purchase advantages and disadvantages

Personal Contract Purchase (PCP) is a type of finance agreement for personal customers looking to fund a new vehicle in a manageable way

The monthly payments are not subject to VAT, however if you do take out the optional service package then you will have to pay VAT on the service costs.


  •  Low initial payment 
  • Fixed monthly payments 
  • You may be able to refinance the Optional Final Payment 
  • No depreciation concerns if you wish to walk away at the end 
  • Maintenance and servicing can be included 
  • Fixed Optional Final Payment when you first take out the contract 
  • Cost effective 


  •  You will have to make a decision at the end of the contract as to whether you wish to sell the vehicle, return it or keep it 
  • You must have fully comprehensive vehicle insurance 
  • A charge can be made for damage to the vehicle (not fair wear & tear) 
  • A charge will be made for excess mileage if the contract mileage is exceeded 

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