PCP vs PCH: What this means for you?

When you’re researching your next car, you’ll no doubt have come across finance terminology. The examples featured on many offers and listings are designed to help you understand how much you’ll pay, both as a deposit and per month – but they aren’t set in stone. And it’s normally only one option that’s presented. Here, we outline two options available with Peugeot Finance, to help you decide which is best for you.


Personal Contract Purchase – or PCP – is ideal for those who want low monthly payments to suit their budget. When you’ve chosen your Peugeot, you’ll need to put down a deposit – typically 10% of the vehicle’s value – which can be partly made by part-exchanging your current vehicle.

You’ll then have to make monthly payments over an agreed period, usually 24-36 months. The amount you borrow is based on how much value the car will lose over the term of the agreement, minus the deposit. That means you’re not paying off the full value of the car.

Should you wish to own the car at the end of the agreement, you’ll need to make a final payment, often called a balloon payment. This amount will depend on the deposit and monthly payments you’ve made, and relates to how much the dealer expects the vehicle to be worth once your finance deal ends. You don’t have to pay it though; instead you can return the car and choose a new one.


Another of the common Peugeot Finance deals is Personal Contract Hire, or PCH. Also known as a personal lease, it is a long-term rental agreement that enables you to make low monthly payments for your new vehicle. As with PCP, you pay an initial deposit followed by fixed monthly instalments. The term of the agreement usually runs for between 24 and 48 months.

With this option, there’s no opportunity to buy the car at the end. You’ll return it with nothing more to pay. The benefits of this are that you can enjoy a brand new car every few years, and monthly payments are often lower than those on PCP deals – so you may be able to afford a more expensive car than you planned for. Of course, penalties also apply for exceeding the mileage allowance or returning the car with damage or excessive wear.

For full details on a Peugeot Finance price, contact Specialist Cars Peugeot today. Or use our finance calculator to see which model and trim level you can afford.

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