Personal Contract Purchase (PCP)
Cards & borrowingA car finance agreement with lower monthly payments and a final optional payment to buy the car.
Overview
PCP agreements include a balloon payment at the end if you want to own the car.
You can return the car or refinance instead of paying the final amount.
Why it matters
- It can lower monthly costs compared to other finance types.
- The final payment can be large.
- It is reported on your credit file.
FAQs
Do I have to buy the car at the end of PCP?
No. You can return the car or refinance the final payment.
Does PCP affect my credit score?
Yes. It is a credit agreement reported to agencies.
Related terms
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