How Personal Contract Purchase (PCP) Works
With PCP, the lender sets a guaranteed future value (GFV) for the car at the end of the agreement. Your monthly payments cover the difference between the price and that value, plus interest, so they’re usually lower than hire purchase. At the end, you choose: pay the optional final payment and keep the car, hand it back, or use any equity towards your next car. Boost Finance compares PCP lenders for new and used cars, including prestige and performance models.
PCP in three steps
Step 01
Agree the mileage
Set an annual mileage. The lender uses it to work out the guaranteed future value.
Step 02
Lower monthly payments
Pay a deposit, then monthly payments based on the difference between price and GFV.
Step 03
Choose at the end
Keep it by paying the final payment, hand it back, or part-exchange it for your next car.
Is PCP right for you?
Why drivers choose PCP
- Lower monthly payments than hire purchase on the same car
- Flexibility at the end: keep, return or part-exchange
- Protection on value: the GFV is agreed upfront
- Popular with drivers who change car every few years
You don’t own the car unless you pay the final payment, and you’ll pay more in total than HP if you keep it.
HP, PCP and lease purchase compared
| Hire purchase | PCP | Lease purchase | |
|---|---|---|---|
| Monthly payments | Highest, as you repay the full amount | Lower, as part of the cost is deferred | Lower, with a balloon at the end |
| Final payment | None, or a small option fee | Optional final payment (GFV) | Balloon payment, which you must settle |
| At the end | You own the car | Keep, return or part-exchange | Pay, refinance or sell to settle the balloon |
| Mileage limits | No | Yes, with excess mileage charges | Usually not, depending on the lender |
| Best for | Owning outright | Changing car every few years | High-value cars that hold their value |
Features vary by lender and agreement. We’ll explain the terms of any agreement before you sign.
Things to know about PCP
Mileage and condition
If you return the car, you may pay charges for excess mileage or damage beyond fair wear and tear.
Final payment
To keep the car you’ll need to pay the optional final payment, by cash or by refinancing it.
Voluntary termination
On a regulated agreement you can hand the car back once you’ve paid half the total amount payable, subject to its condition.
Other ways to finance your car
Hire purchase (HP)
Fixed monthly payments, and the car is yours once the final payment is made.
Car hire purchase →
Lease purchase
Lower payments with a final balloon, popular for high-value and appreciating cars.
Lease purchase →
Car equity release
Release cash from a car you already own, or refinance your current agreement.
Equity release →
Why drivers use Boost
Specialist lenders
We work with lenders who understand prestige, performance and older cars that mainstream lenders can be cautious about.
Any dealer, new or used
Franchised dealers, specialist independents and, with some lenders, private sellers. We deal with the seller for you.
Clear figures, fast
Deposit, monthly payment and any final payment set out clearly, with one point of contact from first call to collection.
Finance is subject to status and available to UK residents aged 18 and over. Boost Finance is a credit broker, not a lender.
PCP Car Finance FAQs
What happens at the end of a PCP agreement?
You can pay the optional final payment and keep the car, hand it back with nothing more to pay (subject to mileage and condition), or part-exchange it. If the car is worth more than the final payment, that equity can go towards your next car.
Can I get PCP on a used car?
Often, yes. Many lenders offer PCP on used cars, depending on their age and mileage at the end of the agreement.
What is a guaranteed future value?
It’s the lender’s estimate of the car’s value at the end of the agreement, which sets the optional final payment.
What if I go over my mileage?
If you return the car, you’ll pay an excess mileage charge per mile. If you keep it by paying the final payment, mileage charges don’t apply.
Is PCP or HP better?
PCP suits lower monthly payments and changing cars regularly. HP suits owning the car outright and costs less in total if you plan to keep it.
Are you a lender?
No. Boost Finance is a credit broker, not a lender. Boost Asset Finance Ltd is an Appointed Representative of EFT Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 667290). We work with a panel of lenders to find the right finance for you.
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