Finance Options at Fish Brothers

What is Personal Contract Purchase (PCP)?

Watch Our Video What is Personal Contract Purchase (PCP)?

Personal Contract Purchase (PCP) is a finance product that allows you the opportunity to buy a new or a used car.

It is similar to a Hire Purchase agreement as you will usually pay an initial deposit, followed by monthly instalments over a term typically between 18 to 48 months.

What makes PCP different to Hire Purchase (HP) is that your monthly instalments are paying off the depreciation of the car, and not its entire value, over the course of the term. Then, when you get to the end of your agreement, there is a final, balloon payment that must be made if you want to keep the car. The balloon payment is often referred to also as the Guaranteed Future Value (GFV).

How does PCP actually work?​

Close

When you have chosen your vehicle, you will then agree your annual mileage and decide on the agreement term with one of our Business Managers.

We will then determine the Guaranteed Minimum Future Value (GMFV) of the vehicle at the end of the agreement and work out a deposit and monthly amount that works for you.

At the end of your agreement you will then have three options:

Return – Simply return the car the back to us
Retain – Keep the car by paying the optional final payment
Renew – Trade it in for another car

For a quotation, help, or advice contact us and ask to speak to one of our Business Managers.

What are the advantages of PCP?

Close
  • Monthly payments on a car financed by PCP are usually lower than if your car is financed by a Hire Purchase agreement.
  • If you decide not to buy the car, you can simply walk away when you've made all the payments.
  • Similar to PCH, you can drive away a new or used car every few years (dependent on the chosen term) without worrying about selling it on.
  • If your car is worth more than the Guaranteed Future Value then you can use that equity towards a deposit on a new car.

What should you consider when opting for PCP?

Close
  • If you want to buy the car you will need to pay your final balloon payment (the Guaranteed Future Value).
  • Similar to PCH, you will need to agree on a mileage allowance at the beginning of your contract and there may be excess mileage charges if you exceed this.
  • You won’t be able to sell the car without settling the finance.
  • You won’t own the car until you have made all of your repayments.
  • You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.

Can I settle my PCP agreement early?

Close

You can normally settle your agreement early by asking the finance company to provide you with a settlement figure. However, the finance company will require you to pay off the difference between what your car is worth, and what you still owe and there may be a difference which is known as negative equity. On the other hand, you may find that at the end of your term your car is worth more than the Guaranteed Future Value, which means you will have some positive equity to contribute towards your next car.

What is Hire Purchase (HP)?

Watch Our Video What is Hire Purchase (HP)?

Hire Purchase is a way to finance buying a new or used car. You will normally pay an initial deposit and will pay off the entire value of the car in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the car outright.

What are the advantages of HP?

Close
  • You’ll be able to drive away a car that you may not have managed to buy outright.
  • Unlike a PCP or PCH contract, you won't need to estimate your mileage at the start of your Hire Purchase agreement, so you'll avoid excess mileage charges.
  • Once you’ve made your final monthly payment, including the option to purchase fee, you'll have full ownership of the car.

What should you consider when opting for HP?

Close
  • Monthly payments may be higher than some other finance options, such as PCP, as you're paying off the full value of the car.
  • You won’t be able to sell the car without settling the finance.
  • You won’t own the car until you have made all of your repayments.
  • You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.

Can I settle my HP agreement early?

Close

The short answer is yes, you can end your finance early. There are different provisions within each finance agreement that allows you to do just that. If you have got through two-thirds of the way through your finance agreement, the options to end the finance agreement early open up.

For a Hire Purchase agreement, there is an option of paying it off early through a settlement fee. A settlement fee covers the cost of any remaining unpaid instalments and interest payments remaining on the agreement. Once the settlement fee is paid, you take full ownership of the car early.

Under a Personal Contract Purchase agreement, you can also pay a settlement fee for bringing the agreement to an end early. After that, you can choose to hand the car back or you have a second option. Through a PCP agreement, you can take full ownership of the car by paying off the remaining Guaranteed Minimum Future Value also known as a balloon payment.

Finance Products

Whether it’s a brand new or fully approved used car you a looking to for, we can help. We have partnered with different finance providers to bring you great value packages across our products, making buying and maintaining your vehicle as easy and affordable as possible. We have outlined the details of different finance packages below, as well as provided some useful video, but please do get in contact if there is anything you are unsure about. You can also find our current finance offers here.

Hire Purchase

This finance method allows you to spread the cost of your vehicle over an agreed term, allowing you work to a monthly budget. Once all the payments are made, ownership of the car will transfer over to you with no additional fees.

Car HP FCA

Benefits

  • Fixed monthly payment
  • Variable deposit
  • Complete ownership when agreement finishes
  • No large final payment
  • Great for budgeting

How it works

Once you have decided on your next vehicle, you will then need to determine how much your monthly payment will be. This is calculated using the amount of deposit you would like to put down and how long you’d like the agreement to last. Once this is all agreed and all contracted payments have been made, the vehicle will be yours.

Personal Contract Hire

Also known as PCP, Personal Contract Hire is becoming a very popular alternative to the Hire Purchase method. It’s an affordable and low risk way to finance your vehicle, where a Guaranteed Future Value (GFV) or Optional Final Payment is set based on an agreement term and expected mileage, which then protects the future value of your vehicle. You then have three options when the agreement comes to an end, upgrade, keep or return the vehicle.

Car PCP FCA


Benefits

• Fixed low monthly payments
• Flexibility and choice come the end of your agreement
• Protection on vehicle value

How it works

Once you have picked out your next vehicle, we agree on an initial deposit amount, expected annual mileage and the term of your agreement. Monthly payments will then be based on the difference between the value of the vehicle (minus the deposit) and the GFV, which likely means the monthly payments will be lower than using Hire Purchase. Come the end of your agreement you have three choices, upgrade, keep or return. When you upgrade you can part-exchange your vehicle for another, and the new agreement will commence. If you decide to keep your vehicle, all your monthly payments must be up to date, then all you have to do if pay the GFV. Finally, you can just return your vehicle with nothing further to pay, as long as all monthly payments are up to date, maximum mileage isn’t exceeded and fair wear and tear conditions are met.

Take control of your car finance with the RTI cover we offer.

With RTI insurance you can fetch the entire amount of loss that you have incurred. RTI cover can also help to protect the purchase price of your vehicle and offer financial protection that you need.

What if?

Your car is declared a write-off due to an accident, fire or theft?

Cars depreciate as they age and your insurer will probably only pay out the current market value leaving you seriously out of pocket. This is a scenario faced by many motorists today. The shortfall could be a significant sum depending on the rate of depreciation of your vehicle.


Who will protect you against this financial loss?


Who will ensure you get back to the amount you originally paid for the car?


For peace of mind and the protection, consider the cover RTI can offer.

How RTI works

Let’s say you paid £18,500 for your car and it is unfortunately stolen and not recovered. The motor insurance provider then declares it a total loss and they value your car at £12,000 using current market conditions. The RTI insurance may payout £6,500 to ensure you receive the total originally paid for your car - it’s as simple as that!

Significant benefits


  • Designed to protect the purchase price of your vehicle for up to 36 or 48 months.
  • Provides financial protection if you have paid for your vehicle outright.
  • May pay the difference between the amount paid out by the motor insurance provider and the invoice price of the vehicle.
  • Meets the ABI code of practice.
  • Transferable.
  • Cancellable.