Compare PCP Car Finance Deals from 9.9% APR

What is PCP Car Finance?

Personal Contract Purchase (PCP) is one of the most popular ways to finance a new or used car in the UK. You pay a deposit, followed by fixed monthly payments that are usually lower than other finance types. This is because you're only paying off part of the car's value, not the whole thing.

At the end of the agreement, you choose whether to hand the car back, pay a final "balloon payment" to own it outright, or use any equity towards your next car. It's a flexible option if you like driving a newer car without committing to full ownership.

PCP vs Other Car Finance Options

Finding the right type of car finance really comes down to what works best for your budget, lifestyle, and plans.

	Hire Purchase (HP)	Personal Contract Purchase (PCP)	Leasing	Personal Loan
Requires deposit	Usually	Usually	Usually	No
Fixed monthly payments	Yes	Yes	Yes	Yes
Own the car immediately	No	No	No	Yes
Own the car at the end	Yes	Optional (with final balloon payment)	No	Yes
Excess mileage charges	No	Yes	Yes	No
Secured (against the car)	Yes	Yes	Yes	No
Options for bad credit	Possibly (higher rates)	Possibly (higher rates)	Possibly (higher rates)	Possibly (higher rates)

Is PCP Right for You?

PCP works well for some drivers more than others. Before choosing, it's worth asking yourself:

Do I want lower monthly payments, even if it means I don't automatically own the car?
Am I happy to stick within an agreed annual mileage limit?
Do I like changing my car every few years rather than keeping one long-term?
Would I rather decide later whether to keep, return, or part-exchange the car?

If you answered yes to most of these, PCP could be a better fit than Hire Purchase or a personal loan.

Car Finance Calculator

The CK car finance calculator provides an estimate for illustrative purposes only, and it is based on the information you have entered. It does not guarantee you will be approved for a loan, and actual rates and repayments may differ.

Rates start from 9.9% APR.
Representative example: borrowing £7,500 over 48 months with a REPRESENTATIVE APR of 23.9%, an annual interest rate of 23.9% (Fixed) and a deposit of £0.00, the amount payable would be £234.76 per calendar month, with a total cost of credit of £3,768.48 and a total amount payable of £11,268.48.
Rates may differ as they are dependent on individual circumstances. Rates from 9.9% APR: the exact rate you will be offered will be based on your circumstances, subject to status. No initial impact to your credit score but a hard search will be added to your credit profile if you decide to proceed with finance.

Getting PCP with Bad Credit

Having a low credit score can make it harder to get approved for PCP, but it's still possible. At CreditKnowledge, we work with a panel of trusted lenders, including some who specialise in bad credit car finance.

Here’s what to keep in mind:

You may face higher rates due to your current credit history.
Missing payments could damage your credit rating further.
Because PCP uses the car as security, approval could be more likely than with an unsecured loan.
Consistently making payments could gradually improve your score.

Improving your credit score can potentially give you access to better rates. Learn what’s lowering your score with your free credit report.

Please note that not all applicants will qualify for a loan, and not all lenders offer the full range of loan amounts or terms shown. We provide a free loan comparison service and act as a credit broker, not a lender. We may receive commission or other fees from providers if you take out a product through our service.

You can check your eligibility with no impact to your score. Only once you decide to proceed with a specific finance option will a hard credit check be conducted, which may affect your credit score.

Please ensure that you can afford the repayments before taking out any form of credit.

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk