A Personal Contract Purchase (PCP) can also be arranged by cartime from start to finish, quickly and hassle-free. You can even drive away in your dream car on the day of purchase.
After paying your deposit, your contract will commit you to equal monthly payments over an agreed term with an optional, larger final payment. This is commonly known as the Guaranteed Minimum Future Value or GMFV and is the estimated re-sale value of your car at the end of your contract. When your contract expires, you can either hand back the car, with no penalty, or pay the GMFV to gain complete ownership of the car.
If you do decide to hand back the car, you can use any value over and above the GMFV to trade in towards a new model!
With PCP, monthly payments are generally lower than HP and contracts are often shorter. The GMFV is based on a forecast of annual mileage which must be adhered to throughout the contract, with a price per additional mile payable when handing back the car. Because of the lower payments and option to buy, PCP is a very popular method of buying used cars on finance.