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Leasing Finance

Last Updated: 27th Sep 2018

How Does A Personal Contract Purchase Agreement Work?

Personal Contract Purchase agreements are finance options that give you a chance to drive away with a car with the possibility of ownership. PCP agreements work with you placing down a deposit and paying fixed monthly payments for an agreed period of time.

At the beginning of the agreement, a guaranteed minimum future value is calculated and this acts as the balloon payment at the end. When a PCP agreement comes to an end, you have three options available to you: return the car, pay the balloon payment, or part exchange and upgrade.