PCP Car Finance in Newcastle
PCP car finance can seem like a maze at first. This guide breaks it down step-by-step, in plain English, so you know exactly what you're signing up for.
At Zoomo, we offer PCP car finance in Newcastle for all credit types. Whether your credit is spotless or has a few bumps, we will help you find a suitable option, and there's no pressure to make a fast decision or go ahead with a purchase.
Find the honest answers you've been looking for right here.
Curious what your PCP payments could be? Find out here in seconds.
Subject to status. UK residents aged 18+.
What Is PCP Car Finance and How Does It Work
Personal contract purchase car finance, or PCP, is a popular way to fund a car because the monthly payments are often a little lower than other options.
It works like this: You pay for the car's lower value over time, rather than the whole price. That drop in value is called depreciation. Because of this, your monthly payments are calculated using that difference, which helps reduce what you pay each month.
At the beginning of the agreement, you might pay a deposit, though low or no-deposit options do exist. Then, you make fixed monthly payments over a set term. At the end of the term, there's an optional final lump sum called a balloon payment.
When the agreement comes to an end, you have three choices:
You can pay the balloon payment and own the car.
You can hand the car back with nothing more to pay, as long as it meets the agreed condition and mileage.
You can part-exchange the car and use any value toward another one.
That's PCP explained for UK drivers.
Compared to HP, PCP usually means lower monthly payments. That's a big plus. On the flip side, you won't own the car outright unless you pay the final amount due. Mileage limits also apply, so it's worth thinking about your driving habits before you decide which financing route to take.
Who PCP Suits
PCP might be a good option if you're someone who values lower monthly payments and likes the idea of getting a different vehicle every couple of years. It also suits drivers who want flexible options at the end of the term, instead of just one fixed path.
PCP is available for people with all credit options. If your score has taken a hit, PCP might still be an option for you through specialist lenders. We help almost everyone find a way forward, even after past issues.
If you're ready to start the process,
apply for car finance.
Subject to status. UK residents aged 18+.
Frequently asked questions
What is PCP car finance?
PCP is a way to pay for a car where you cover its drop in value instead of the whole price. Going for a PCP option typically means lower monthly payments, but that comes with a trade-off. At the end of the term, you won't own the car yourself unless you make a lump sum payment. That's the difference between PCP and HP. With HP, you'll own the car.
If you want to learn more, you can explore your options for car finance in Newcastle with Zoomo.
What happens at the end of a PCP agreement?
When your PCP term ends, you get three choices. You can pay the final balloon payment and own the car. You can hand the car back with nothing more to pay, subject to mileage and condition. Or you can part exchange and put any value toward another car. That flexibility is a big reason people choose PCP over HP.
Is PCP available for bad credit?
Yes, PCP can still be an option if you have bad credit. Specialist lenders look at your situation as a whole, including your current income and what you can afford now.
If you're keen to get on the road, browse used cars and then apply for finance online.
What is the balloon payment?
The balloon payment is the final lump sum that's due at the end of a PCP agreement. It's set at the start of the term and is based on the car's expected value later. You only pay it if you want to own the car.
The balloon payment is also why PCP often comes with lower payments. You can use our car finance calculator to get an idea of what this might look like.
Is PCP or HP better for me?
It really depends on what you want from your car. PCP gives you lower monthly payments and end-of-term options. HP leads to ownership after the last payment.
If you prefer flexibility, PCP might appeal to you more. If you want to own the car outright, HP could be the better choice. You can compare both in our HP car finance explained guide.
