Car Statistics & Trends for 2025
Understanding key car statistics and trends for 2025 can
PCP Car Finance
Flexible Monthly Payments, Lower Costs, and More Options—Experience the Benefits of PCP Car Finance Today!
- Get a no obligation quote in less than 60 seconds
- Find the perfect deal for you with tailored terms and flexible car finance options
- We’ll look to beat any quote you find elsewhere
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What is PCP Car Finance?
Personal contract purchase (or ‘PCP finance’) is a type of car finance loan that gives you options; you’ll pay fixed monthly payments, and at the end of your finance agreement, you can choose to buy the car, give it back, or trade it in for a new one.
Your PCP finance loan doesn’t have to cover the full cost of your car. Instead, you only need to borrow the amount of value that the lender thinks your car will lose while you have it.
This means you’ll typically have lower monthly payments than you might with other car finance options, but you won’t automatically own the car when the agreement ends.
To avoid paying extra charges:
- Keep the car by paying the final payment.
- Return the car with no extra costs (subject to mileage and condition).
- Upgrade to a new car by starting another PCP agreement.
The Pros and Cons of PCP Financing
Personal Contract Purchase is perfect for those who want a great new motor but don’t want to commit to buying it just yet. It offers ultimate flexibility.
PCP Is Perfect for You if You Want…
Lower Monthly Payments
Pay less each month while you decide if you want to buy the vehicle outright. That’s right: with PCP financing, there’s no obligation to buy. Instead, you pay smaller instalments with the option of a final balloon payment at the end of the term.
End-of-Term Flexibility
When your loan term ends, you can decide whether to buy the car outright with a balloon payment, return it at no extra cost, or trade it in for another model. With this model, you could upgrade your vehicle every few years without ever needing to buy.
Low Initial Payment
PCP deposits are usually around 10% of the car’s total value. That’s lower than deposits for other financing models, meaning you could begin your journey with your dream car sooner and without breaking the bank.
PCP Might Not Be for You if You Want…
Guaranteed Car Ownership
PCP doesn’t guarantee ownership at the end of the loan term (although you have that option). If you want to know you’ll own the car at the end of the loan term, consider HP financing. With HP, you’ll pay higher monthly payments, but you’ll end up owning the car (with no balloon payment necessary).
Access To Better Rates With Poor Credit
If you’ve got poor or no credit history, you may need Guarantor Car Finance. With this structure, a guarantor agrees to cover your payments should you be unable to pay. This makes it easier to get a loan, but you’ll need someone who can legally act as your guarantor.
No Deposit
With a PCP agreement, you’ll usually pay 10-20% of the car’s value as a deposit. Having trouble saving? Try a handy No Deposit solution. A No Deposit Car Finance model means you don’t have to pay the initial payment. However, that cost is added to your monthly payments, which will be higher than they would be with a PCP.
A New Finance Agreement With Negative Equity
Perhaps you’re already paying off a car, but you’re paying more than it’s worth. This gives you negative equity. Did you know you may be able to roll that debt into a new finance deal, giving you an upgrade? Check out our Negative Equity car finance options!
So which finance type is right for you? The key advantage of PCP car finance is flexibility. With a PCP agreement, you’ll have lower monthly payments and the opportunity to buy the car outright with a final balloon payment—without obligation.
Getting Approved for PCP Finance - Can I get a PCP loan?
When you apply for PCP car finance, we’ll work to secure an approval in principle from our network of trusted lenders. This process involves a soft credit check (don’t worry: this won’t impact your credit score). While some lenders prefer borrowers with a good credit history, we aim to assist individuals from all financial backgrounds, giving you the best chance of securing the right PCP agreement.
Eligibility
You must be at least 18 years old and have a minimum of three years’ address history in the UK.
Soft Credit Check
We’ll conduct a soft credit check to find an approval in principle, which won’t affect your credit score.
Credit History Consideration
While a good credit score can improve your chances, lenders may also consider other factors such as income, debt-to-income ratio, and employment stability.
Finance Calculator
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From Our Expert
"PCP is great because it offers lower monthly payments, flexible end-of-term options, and the ability to drive a new car every few years, making it a popular choice for car buyers"
Matthew Evans
Head of Content and Conversion
What Happens at the End of Your PCP Agreement?
A Personal Contract Purchase PCP deal is a great option for any would-be car owner who wants ultimate flexibility. Why? Because with a PCP car finance agreement, you don’t have to commit to buying the vehicle outright. Let’s explain:
At the end of your PCP agreement, you’ll have three options:
Pay the Balloon Payment
When you sign up to a PCP agreement, our lenders will assess your car’s predicted future value at the end of the loan. We call this the ‘Guaranteed Minimum Future Value’ or ‘balloon payment’; think of it as the final lump sum.
If you’re not ready to part with your car and want to buy it outright, you can pay the balloon payment. The car’s yours!
Return the Car
Perhaps you want to upgrade to a newer car. With a PCP deal, that’s also possible. Plus, it won’t cost you anything extra (provided the car’s in good condition and within the pre-agreed mileage limit).
Return the car, get a new one—the choice is yours.
Trade It in for a New Car
If the car’s market value is higher than the balloon payment, you may be able to upgrade to a newer model. That equity can go towards a deposit for a new PCP agreement, meaning you’ll drive away with an upgrade and a brand new PCP finance deal.
How to Choose the Best Personal Contract Purchase PCP Deal
Not all PCP finance agreements are the same. Different lenders offer different terms, all of which depend on multiple factors. Only ever agree terms that suit your needs and which you can afford. Here are a few tips for choosing the best Personal Contract Purchase PCP deal:
Compare Interest Rates (APR)
APR (Annual Percentage Rate) is crucial. A low APR means lower fixed monthly payments—which could mean hundreds saved over the course of your loan. So do your wallet a favour and look for low fixed interest rates!
Look at Total Cost
Low monthly payments are great, but they could mean higher balloon payments at the end. When looking for your perfect PCP finance deal, take into account how much you’ll pay overall. That includes the balloon payment, deposit, and additional fees like admin and excess mileage charges.
Find the Right Mileage Limit
PCP deals often come with mileage limits. If you go beyond the set limit, you could incur extra charges (sometimes up to 10p per mile). While standard limits are 6,000-12,000 miles per year, the number’s often negotiable.
Plus, some lenders allow handy mid-term mileage adjustments.
At Car Finance Today, we find the best deals so you don’t have to. We only partner with reliable, trusted PCP lenders and always find the best PCP terms to suit your needs. Choose Car Finance Today for quicker, easier PCP car finance!
How to Choose the Best Personal Contract Purchase PCP Deal
Not all PCP finance agreements are the same. Different lenders offer different terms, all of which depend on multiple factors. Only ever agree terms that suit your needs and which you can afford. Here are a few tips for choosing the best Personal Contract Purchase PCP deal:
Compare Interest Rates (APR)
APR (Annual Percentage Rate) is crucial. A low APR means lower fixed monthly payments—which could mean hundreds saved over the course of your loan. So do your wallet a favour and look for low fixed interest rates!
Look at Total Cost
Low monthly payments are great, but they could mean higher balloon payments at the end. When looking for your perfect PCP finance deal, take into account how much you’ll pay overall. That includes the balloon payment, deposit, and additional fees like admin and excess mileage charges.
Find the Right Mileage Limit
PCP deals often come with mileage limits. If you go beyond the set limit, you could incur extra charges (sometimes up to 10p per mile). While standard limits are 6,000-12,000 miles per year, the number’s often negotiable.
Plus, some lenders allow handy mid-term mileage adjustments.
At Car Finance Today, we find the best deals so you don’t have to. We only partner with reliable, trusted PCP lenders and always find the best PCP terms to suit your needs. Choose Car Finance Today for quicker, easier PCP car finance!
Why Choose Car Finance Today?
Why Choose Us for PCP Financing?
At Car Finance Today, we make your car finance journey smooth and hassle-free by offering tailored assistance and access to the best deals, no matter your credit history.
A Helping Hand
At Car Finance Today, we’re committed to helping people enhance their everyday lives through accessible car finance options. We strive to break the cycle for individuals who find themselves stuck without a reliable vehicle, impacting their ability to commute and improve their financial standing.
The Best Deal for You
Whether you need a vehicle for family errands, work commutes, or something you’ll feel proud to drive, we’ll connect you with the best deals from our network of trusted lenders. Even if your credit history isn’t perfect, we’re here to help you find the right financing solution.
Dedicated Account Manager
When you choose us, you’ll have a dedicated account manager by your side. From start to finish, they’ll guide you through the entire process, ensuring every step is simple, transparent, and stress-free.
Get your no obligation PCP car finance quote in 60 seconds
Flexibility at the End of the Term
Personal Contract Purchase (PCP) finance is a modern and innovative approach to car financing, designed to offer flexibility, affordability, and convenience. It’s an ideal choice for anyone looking to drive their dream car without the financial burden of full ownership.
Lower Fixed Monthly Payments
Spread the cost over manageable monthly instalments.
Flexibility
Options at the end of the term give you control over your car ownership, like making a final balloon payment.
Budget-Friendly
Pay only for the car’s depreciation, not the full value.
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FAQs
You may be charged an additional fee per mile if you exceed the agreed-upon annual mileage limit.
Yes, though early termination fees may apply depending on the terms of your agreement.
A good credit score can help, but options are available for various financial backgrounds.
As long as the car is within the mileage and condition agreement, you can return it with no extra costs.
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