Personal Contract Purchase
Lincoln Finance are an asset finance company based in Penistone, Sheffield, offering personal contract purchase options. We provide our services to businesses throughout the UK and specialise in vehicle and equipment finance solutions.
Personal Contract Purchase Agreement (PCP)
A Personal Contract Purchase (PCP) is a flexible vehicle finance agreement allowing individuals to drive a new or used car with lower monthly payments than a traditional purchase. Instead of paying off the full cost of the vehicle over the agreement, a significant portion of the price is deferred to a final balloon payment, also known as the Guaranteed Future Value (GFV). At the end of the agreement, the customer has three options: return the car, trade it in for a new one, or pay the final balloon payment to take ownership.
Features of PCP Financing
- Low Monthly Payments: Payments are lower than purchases because part of the cost is deferred.
- Guaranteed Future Value (GFV): The lender sets a fixed future value for the car, which is the amount required to buy it outright at the end of the term.
- Flexible End-of-Term Options: The customer can:
- Return the car without further payments (subject to mileage and condition limits).
- Trade-in for a new car using any equity remaining in the vehicle.
- Pay the GFV to own the car outright.
- Deposit Contribution: Some manufacturers and dealerships offer a deposit contribution to reduce upfront costs.
- Mileage Limits Apply: Agreements have an annual mileage limit, and exceeding it may result in additional charges.
Benefits of a PCP Agreement
- Affordability: Lower monthly payments make new or higher-spec vehicles more accessible.
- Flexibility: At the end of the term, customers can choose to keep, return, or upgrade their vehicle.
- Guaranteed Future Value: This protects against depreciation, as the final value is pre-agreed.
- Lower Risk: If the car’s market value drops below the GFV, the customer can return it without financial loss.
- Frequent Vehicle Upgrades: Ideal for drivers who like to switch cars every few years.
A PCP agreement is widespread for those who want flexibility, lower monthly costs, and the option to drive a newer car more frequently.
Tailored Asset Finance Solutions
Lincoln Finance’s tailored asset finance solutions for UK businesses and individuals. Explore our comprehensive services below, designed to deliver competitive, flexible funding options with expert support.
