Personal Contract Purchase (PCP) Finance is a popular and flexible way of financing a new commercial vehicle.

If you opt for a PCP finance plan, you pay a deposit and monthly instalments just as you would if you took out a loan however, these amounts are often smaller than other methods of finance. This is because the PCP deal requires a final sum or 'balloon payment' to be paid at the end of the agreement before the commercial vehicle becomes yours.

However, you don't necessarily have to pay the balloon payment in your PCP deal, as there are a number of options available to you. Once you've completed all the monthly payments (you'll have paid off approximately a third of the cost of the commercial vehicle) and you have three options.

  1. Make the final payment and take ownership of the vehicle
  2. Return the commercial vehicle​ to the dealership and walk away
  3. Trade the commercial vehicle in and start a new deal on a new commercial vehicle

PCP gives a lot of flexibility and it is more like leasing a commercial vehicle but with the option to own at the end.

When setting up a PCP deal the dealership will give you a 'Guaranteed Minimum Future Value' for the commercial vehicle. This is the minimum amount the commercial vehicle​ will be worth at the end of the agreement. A GMFV protects you should the commercial vehicle unexpectedly drop in value, or if the commercial vehicle is worth more you can use the equity as a deposit for your next PCP deal.

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Why PCP?

It puts you in the driving seat - purchase the commercial vehicle, part-exchange it or simply return it, the choice is all yours!

Manageable Monthly payments - perfect for budgeting

Guaranteed Value - the lender guarantees a minimum future value for your commercial vehicle

Tax breaks - If you're opting out of a company scheme, your cash alternative isn't subject to company commercial vehicle tax

VAT free - no VAT on payments