PCP has proven to be one of the more popular choices amongst individuals looking to finance their new motor vehicle without paying the high premiums associated with taking out a separate loan.

What many find attractive is the ease and simplicity of a personal contract purchase, the initial payment is relatively low and the monthly payments thereafter are also very affordable.

This is made possible by the deferring of the cost of the car to the end of the term. At which point the owner is given four options; make a balloon payment for the outstanding amount and own the car outright, choose to use the GFV (guaranteed future value) of the car as a down payment towards their next vehicle from the same company’s fleet of cars, re-finance the remainder of the cost into affordable monthly payments or sell the car on privately, keeping the difference (if any) after paying the company what is owed.

With so many options made available it is clear why PCP is so popular, especially amongst those that like to change their car frequently.