Personal Contract Purchase (PCP)

Personal Contract Purchase is a finance product provided by Honda Financial Services. It offers a flexible way to fund your Honda, with typically lower monthly payments than Hire Purchase and three options available at the end of the agreement.

How it works

Choose the car you want and decide how much deposit you would like to pay.

You then agree the length of your agreement, normally between two and four years, and estimate how many miles you expect to drive each year.

Honda Financial Services uses this information to calculate a Guaranteed Future Value (GFV) - an estimate of what the car will be worth at the end of the agreement. This amount is deferred until the end of the agreement.

Your monthly payments are based on the difference between the price of the car, after your deposit, and its Guaranteed Future Value, with interest added. This means monthly payments are typically lower than with Hire Purchase.

It is important to estimate your mileage accurately. If you return the car at the end of the agreement having exceeded the agreed mileage, an excess mileage charge may apply.

At the end of your agreement

At the end of your PCP agreement you have three options:

Retain: Keep the car by paying the final payment (Guaranteed Future Value) and the £10 option to purchase fee. Once all amounts due have been paid, you will own the car outright.

Return: Provided your monthly payments are up to date, you can return the car to Honda Financial Services without paying the final payment. Additional charges may apply if you have exceeded the agreed mileage or the vehicle does not meet the required return condition.

Renew: You can part exchange the car and use any equity towards your next vehicle. The vehicle's market value is not guaranteed to exceed the outstanding final payment.

Things to consider

PCP can provide lower monthly payments than Hire Purchase, but the total amount payable is likely to be higher than an equivalent Hire Purchase agreement.

If you want to own the car at the end of the agreement, you will need to make all regular payments and pay the Guaranteed Future Value and option to purchase fee.

Mileage limits apply, and additional charges may be payable if you return the vehicle having exceeded the agreed mileage or if its condition falls outside the applicable return standards.

You are not guaranteed to have equity in the vehicle at the end of the agreement.

For further information, please visit Honda Financial Services' Personal Contract Purchase information.

Other Honda Finance products

Further Information

If you would like to discuss your finance requirements, please Contact our Sales Team, or call our Business Manager, Mark Hannay, on 01932 877234.