Home » Finance

Buying A Car With A Personal Contract Purchase Loan

Aug 17, 2007
If you are looking to buy a car but are unsure whether or not a new car is worthwhile, then you should consider the benefits of buying a car with a personal contract purchase loan. Using a personal contract purchase loan can reduce the amount of depreciation you suffer, and help you to get the car you want. Here is some more information about buying a car with a personal contract purchase loan.

What is a PCP?

A PCP, or personal contract purchase loan, is a personal contract for private individuals. It allows you to set a contract term with monthly payments for your new car. At the end of the term you can either purchase the vehicle fully or give it back to the contact provider.

Costs of a PCP

The costs of a PCP depend on the car you are buying, and how much deposit you can afford to put down. It also depends on the length of the contract, as well as other factors like maintenance requirements. However, the length of the agreement will usually last from 24-42 months, during which time you pay a monthly cost as a rental of the vehicle.

Guaranteed future value

One advantage of a PCP is that you will get a minimum guaranteed future value agreed, so that you know how much you will have to pay at the end of the loan term to buy the car outright. You can either pay the guaranteed value and own the car, hand it back without any payments, or use the guaranteed value towards another new car.

Cheaper than many other methods

Apart from flexibility, the main advantage of a PCP is that you have fixed monthly payments that are likely to be lower than other forms of auto finance. Also, if you get a PCP with maintenance included you will not have to worry about large repair costs like you might with a used car. Also, depreciation is lower because you have a guaranteed future value.

Losing the car

Perhaps the biggest disadvantage of a PCP is that during the contract term you do not actually own the car. You are simply leasing it from the provider, so if you should fail to make the payments the car can be taken away from you. Before taking out a PCP, make sure you can afford the repayments so that you will be able to keep the car you want.

Cheaper than a loan

Although PCP means you don't own the car during the contract term, it is much cheaper than a loan for financing a car. Even if you get a very low rate, you will pay back more and the depreciation will be higher. If you are looking to buy a car and you don't want to pay outright, then go for a PCP.
About the Author
Peter Kenny is a writer for The Thrifty Scot, please visit us at Compare Personal Loans and Debt Consolidation Loans
Rating:
Please Rate:
(Average: Not rated)
Views: 109
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources