What is Personal Contract Purchase (PCP)?
A popular and affordable way to finance a car, Personal Contract Purchase is a package that covers the depreciation value of your chosen vehicle, as opposed to its full value. You’ll make a deposit followed by monthly instalments, and when the agreement ends, you’ll have three options: return the vehicle with nothing more to pay; trade in for a new model; or to make a final ‘Guaranteed Minimum Future Value’ payment, to own the vehicle outright.

How does PCP actually work?​

The required deposit for a PCP plan is usually around 10% of the vehicle’s value. You’ll then pay fixed monthly instalments over a 12-48 month period to cover the depreciation value. This figure is the difference between the sale price and the Guaranteed Minimum Future Value, which is agreed at the start of the contract. At the end of the term, you will have the option of paying off this figure to become the full owner, or you can return the vehicle, or trade it in for a new one. 

What are the advantages of PCP?

The monthly payments for PCP agreements are often lower than on other purchase plans, making this an affordable way to finance your Jaguar. Many customers like the flexibility that PCP contracts offer too, as they can make the decision whether or not to purchase the vehicle at a later date.

What should you consider when option for a PCP?

PCP agreements do have mileage allowances, so be sure to make an accurate estimate of your annual mileage to avoid incurring additional costs. Remember too that although you’re not the owner of the vehicle, you’re still required to tax, insure and maintain it. 

Can I settle my PCP agreement early?

You can settle a PCP agreement early, and to do so you’ll need to request the settlement figure from your finance provider. This figure is the difference between what the car is worth and what you still owe - that means settling early may result in negative equity. 

What is Hire Purchase (HP)?
If you want to purchase a vehicle outright, but don’t have the funds to pay for it in one lump sum, Hire Purchase is the ideal option for you. It enables you to spread the cost of your vehicle over an agreed period of time, making it more affordable.

How does HP actually work?​

The initial deposit for a HP agreement is typically around 10% of the vehicle’s value. After that, you’ll pay the outstanding balance with fixed monthly payments over a period of 12-60 months. When the final payment has been made, you’ll pay a one-off ‘Option to Purchase’ fee - normally around £100-£200 - making you the owner.

What are the advantages of HP?

Hire Purchase is a great plan for those wanting to own their vehicle at the end of the agreement. It means there’s no need for a large final payment, and enables you to put down a larger deposit if you prefer. Another advantage is that there’s no mileage allowance, so you can travel as far as you like without incurring additional fees. 

What should you consider when option for a HP?

Monthly repayments for Hire Purchase agreements can be more expensive than those on PCP or PCH plans, since you are paying for the vehicle’s value as opposed to its depreciation cost. It’s also worth noting that you don’t own the vehicle until the final payment and Option to Purchase fee are paid. 

Can I settle my HP agreement early?

To end your HP agreement early, you’ll need to request the settlement figure from your lender. This figure comprises the outstanding balance of the vehicle and any interest you owe. 

What is Personal Contract Purchase (PCH)?
Personal Contract Hire - sometimes known as Personal Lease - is basically a long-term hire agreement whereby a vehicle is leased over a set period of time, then handed back to the dealer once the contract comes to an end. It’s a hassle-free way to enjoy a car without buying it.

How does PCH actually work?​

You’ll need to make an upfront payment, usually equating to three months’ rental, to secure the vehicle. You’ll then pay fixed monthly instalments over a period of 24-60 months, after which you can simply hand the car back to the dealer. You may also be able to include a servicing package in your monthly payments, covering the cost of routine maintenance.

What are the advantages of PCH?

PCH is a great option for those who do want the responsibility of owning a vehicle outright, or who want to have the freedom to change their vehicle every two to five years. It also enables drivers on a budget to enjoy a car they may not otherwise be able to afford, as monthly payments are often less than those made on Hire Purchase agreements.

What should you consider when option for a PCH?

PCH agreements include a mileage limit, so you’ll need to ensure you make an accurate estimate to avoid incurring excess mileage costs at the end of the contract. You will not be the owner of the vehicle, nor will you have the option to purchase it, but you will be responsible for taxing, insuring and maintaining it throughout the term.

Can I settle my PCH agreement early?

A PCH contract can be cancelled early, but this is likely to incur charges, so it’s not generally recommended.