PCP FINANCE

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.

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