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Why would I buy a car through a Personal Contract Purchase?

Like hire purchase, you take a loan through the car dealership and make monthly repayments.

However, instead of paying for the full value of the car, you leave a lump sum to be paid at the end of the contract (the 'final value'). At the end of the term you either pay the lump sum and keep the car, or hand it back to the dealer. These schemes are designed to offer a lower monthly repayment but can work out more expensive than hire purchase or a car loan.


  • Because of the lump sum payment due at the end of the term, monthly repayments are lowered
  • Deposit amounts required are often lower than for hire purchase
  • You can choose to hand the car back at the end of the term or pay the outstanding balance and keep it

Things to consider

  • You don't own the car, so you can't sell or modify it
  • It can be complicated to work out your total costs (e.g. the final value can vary and extra fees may apply)
  • Mileage is agreed in advance, and excess mileage can be costly