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. If you have never entered into a leasing agreement before, you may not be familiar with the term. If this is the case, then you may not know if it would be the right choice for you or not. Many new clients get confused at first because the lesser may ask you for the option of lease or a Personal Contract Purchase. Here you go: http://www.affinityvehicleleasing.com.

The advantages of 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. 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. 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 guarantee
d future value. If you are looking to buy a car and you don't want to pay outright, then go for a PCP.

How to go about it:

You'll be dealing with a finance provider if you decide to take part in a PCP contract. They'll decide the interest rate that they're going to offer you based on the amount of deposit you're willing to pay, the length of the contract you want as well as the amount that needs to be financed. During these negotiations they'll estimate a guaranteed future value (GFV) which takes into account numerous factors of the term, such as the age of the car when it ends, any depreciation it is likely to suffer and the annual mileage estimation made by you. If you enter a PCP contract you'll find that you have the option to take ownership of the vehicle at the end of the term. This is an extremely beneficial choice for some, only requiring a lump sum payment that's equivalent to the projected future value of the vehicle. However it absolutely depends on your personal preferences and circumstances.