Personal Contract Purchase

At Carbase, if you choose to finish your finance deal early, whether that's due to a change in circumstances or wanting to buy the car, you can return the car for a valuation. This valuation will calculate a settlement figure, which is the amount that you are required to pay to close the finance deal, and we can also offer you the option to purchase the car. Once you have the valuation settlement figure, you will then have two options: you can pay the settlement and keep the car, or you can sell the car.

Unlike a personal loan or Hire Purchase (HP), you can get behind the wheel of a new used car for lower monthly repayment costs. It'll also let you fit the monthly payments to suit your budget, so you could buy or borrow a more expensive car than you might not have been able to afford outright.

Since PCP finance deals are only offered on new or nearly-new cars, it's less likely that you'll need to fork out for repairs, so you'll be able to fit it into your finances more easily. Also, since the cars have a minimum sum's worth at the end of your contract, you won't need to worry about the future trade-in or resale value of it.

Finally, a PCP deal is flexible - you'll have several options at the end of your contract, meaning you'll be able to decide whether you want to buy the car or not.

As with other car finance deals, you won't own the car during the period of time before your contract ends. You also won't automatically own it when the contract finishes - you'll have to pay a balloon payment to own the car beyond your contract.

If the predicted balloon payment - the minimum future value of the car - is very close to the actual value of the car when you reach the end of your contract, you will have very little money to roll over to use for the deposit on another car, if you choose not to buy the car you currently have and instead trade it in for a new vehicle. If there isn't any difference, you'll have to come up with the finance for another deposit if you want to start a new PCP finance deal.

There are a few charges that you could face when you hand the car back or trade it in. At the beginning of your finance deal, you will be asked to specify how far you'll drive the car each year. If you go over the agreed limit, you can be charged between 7p-10p for each mile you are over - it's important to carefully check your finance agreement for the exact figure. The future value is also dependent on keeping the car in good condition, so you'll be charged extra to put right anything that's not simply wear and tear damage.

If you're not sure whether PCP finance is the right finance option for you, why not consider Hire Purchase finance? Read more about HP finance here .

If you're wondering whether you'd be able to take out a PCP finance plan due to your credit score, we can assist you. You can compare finance deals from a panel of lenders with your credit rating, from excellent to bad credit, by using our Free Car Finance Check. This will use a quotation search to show your likelihood of acceptance for a finance plan without affecting your credit rating.

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General Terms and Conditions. Please note you will not own the vehicle outright until all payments are made. If you default on your finance payments, then the vehicle may be repossessed by the finance provider. You must be 18 years or older to apply for finance. Finance is not guaranteed, and any finance application is subject to a credit check and individual circumstances. If you require any further information, please do not hesitate to contact us. The finance provider will have their own Terms and Conditions, please contact them directly for further information.

Sub-prime finance is not guaranteed and may cost more than finance provided by a prime lender. We will try to obtain finance for you but there is no guarantee. It may be from a sub-prime lender, and if so, the cost of finance may likely be at a higher rate than prime lenders offer.