What is Personal Contract Purchase (PCP)?
Personal Contract Purchase is a popular choice, and provides an affordable way to finance your Land Rover. Instead of covering the vehicle’s full value, the payments cover its depreciation value, which 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 agreement, you can choose whether you want to own the car outright or return it.

How does PCP actually work?​

You’ll make an initial deposit of around 10% of the value of the vehicle, after which you’ll pay fixed monthly instalments over a period of up to 48 months. When the agreement comes to an end, you’ll have three options: to make a ‘balloon’ payment and become the owner of the vehicle; to return it with no further commitments; or to trade it in for a new model of your choice.

What are the advantages of PCP?

PCP agreements provide an affordable way to finance your Land Rover, with the monthly payments often being lower than on other purchase plans. Many drivers like the flexibility that these contracts offer too, as they enable you to change vehicles on a regular basis.

What should you consider when option for a PCP?

PCP contracts come with a mileage allowance, meaning that if you exceed the agreed annual mileage you’ll be liable for additional charges. Despite not being the outright owner, you’re responsible for maintenance, tax and insurance throughout the term.

Can I settle my PCP agreement early?

To settle a PCP agreement early, simply request the settlement figure - which is the difference between what the car is worth and what you still owe - from your lender. Bear in mind, however, that settling early may result in negative equity. 

What is Hire Purchase (HP)?
Hire Purchase is a popular method of purchasing a vehicle outright, and is often chosen by those who want to own their car, but spread the cost of it over a fixed period. An initial deposit is followed by monthly instalments to cover the balance, after which an ‘Option to Purchase’ fee is made, resulting in complete ownership.

How does HP actually work?​

A Hire Purchase agreement requires a deposit to be made, usually of around 10% of the value of the vehicle. You then pay off the balance with fixed monthly instalments over a term of 12-60 months. After the final payment is made, you’ll pay a small ‘Option to Purchase’ fee of £100-£200, which makes you the vehicle’s owner.

What are the advantages of HP?

Hire Purchase is a great way to purchase a vehicle without having to pay in full upfront, or pay a large lump sum at the end of the agreement. These contracts don’t come with any mileage restrictions, and the bigger the deposit made, the smaller your monthly payments.

What should you consider when option for a HP?

If you make a smaller deposit, you’ll likely find that your monthly repayments are more than they would be for a PCP arrangement, since you’re paying off the vehicle’s full value as opposed to its depreciation cost. Bear in mind too that you are not the vehicle’s owner until the final payment is made. 

Can I settle my HP agreement early?

Yes - simply obtain a settlement figure from your finance provider, which is the outstanding balance of the vehicle plus interest. 

What is Personal Contract Purchase (PCH)?
Essentially a long-term leasing agreement, Personal Contract Hire enables you to make fixed monthly payments to drive the vehicle of your choice. At the end of the contract, you return the car with no further commitments. This type of finance is sometimes called Personal Lease.

How does PCH actually work?​

You’ll make a payment of around three months’ rental upfront before paying fixed monthly instalments over a 24-60 month period. You may also have the option to include a servicing package, which adds maintenance costs to the monthly payments. When the agreement comes to an end, you simply hand the vehicle back to the dealer.   

What are the advantages of PCH?

Many drivers like PCH agreements for their hassle-free nature. Not only do they enable customers to drive a car they may not be able to afford to buy, these contracts also mean you can change your car every two to five years. 

What should you consider when option for a PCH?

PCH contracts have mileage restrictions, so you’ll need to estimate your annual mileage accurately to avoid incurring extra costs. You’re also not the owner of the vehicle, nor will you have the option to purchase it. You will, however, need to insure, tax and maintain it throughout the term.

Can I settle my PCH agreement early?

Yes - although doing so may incur charges so speak to your finance provider beforehand.