The Ultimate Guide to PCP Finance on Used Cars

Why This Guide Matters

Let’s face it: buying a car isn’t like picking up a loaf of bread. It’s more like speed dating combined with high-stakes poker. And when it comes to PCP finance on used cars, the jargon alone could make your head spin faster than a hot lap at Silverstone. But here’s the thing—PCP is one of the most popular ways to get your mitts on motors you’d otherwise only ogle through showroom windows. Whether you’re after a nifty runabout or the sort of wheels that turns neighbours green, knowing your stuff on PCP isn’t just smart, it’s vital. This guide is your no-nonsense, turbocharged map through the maze. If you want fewer regrets and more car for your cash, keep reading.

The Basics Explained

Right, let’s break it down. PCP stands for Personal Contract Purchase, which sounds like something dreamed up by a committee of very serious people in suits. In reality, it’s a way to drive a car for a few years without coughing up the full price upfront. Here’s how it works:

• Deposit: You pay a deposit, usually 10% of the car’s price (though it can be more or less).
• Monthly Payments: You make monthly payments over 2-4 years, which cover the car’s expected depreciation—not the full value.
• Optional Final Payment (GFV): At the end, you can pay a chunky balloon payment (Guaranteed Future Value) if you want to own the car, hand it back, or part-exchange it for another.

A used car PCP deal works much like new, but with a few extra checks and balances because, well, someone’s already had their go in the driver’s seat. The lender is betting on what the car will be worth at the end of your term, so mileage limits and condition matter.

How It Affects You

Let’s say you’ve got your eye on a used BMW with more toys than Hamleys. With PCP, you could drive it for a couple of years for less than you’d spend on a gym membership (and let’s be honest, the car will probably get more use). Your monthly payments are typically lower than standard hire purchase, because you’re not paying off the whole value.

But—and it’s a big but—if you want to keep the car at the end, you’ll need to stump up the balloon payment. Don’t have it? Hand back the keys and walk away, or roll into another PCP deal. Simples.

Remember, PCP isn’t just about numbers. It’s about flexibility. Fancy a new set of wheels every few years? PCP’s your mate. Want to keep your car until it’s old enough to vote? Maybe not. And watch those mileage limits: go over, and the penalty fees can bite harder than a Rottweiler with a toothache.

Our Approach

At Kandoo, we’ve seen more car finance deals than most people have had hot dinners. Here’s how we help you navigate PCP on used cars:
• Clarity First: We cut through the waffle. No ten-page T&Cs in size 6 font. We explain what you’re signing up for, and what it could cost if you scratch the alloys or hit the motorway a bit too often.
• Choice: We’re a broker, not a lender. That means we shop around on your behalf, finding deals that actually work for you—not just the ones that make us look good.
• Support: Our team isn’t a call centre in the middle of nowhere. You’ll get real advice from people who know the difference between a Fiesta and a Ferrari.
• Transparency: We’ll tell you about the balloon payment, the mileage cap, and how wear and tear gets judged. No nasty surprises.
• Speed: Life’s too short to wait. We keep things moving so you can get behind the wheel faster.

In short, we treat your PCP journey the way we’d want ours handled: with honesty, efficiency, and a bit of wit along the way.

Before You Decide

Before you sign anything—yes, even if the car has heated seats and a cupholder big enough for a bucket—ask yourself:
• How much can you really afford each month?
• Do you want to own, or are you happy to swap and change?
• Will you stick to the mileage cap, or is the open road calling?
• What’s the condition policy? Is a scuffed bumper going to cost you a small fortune?

And don’t just take the dealer’s word for it. Crunch the numbers yourself. PCP can look cheap upfront, but costs can mount if your circumstances change. If you lose your job, split with your partner (who always drives anyway), or just decide you hate the colour—exiting a PCP contract early isn’t always easy or cheap.

What’s Real, What’s Hype

There’s a lot of sales patter around PCP. Let’s bust a few myths:
• “It’s the cheapest way to own a car.” Not always. It’s usually cheaper monthly, but owning the car outright via PCP can cost more in the long run.
• “You can walk away at any time.” Sort of. You have rights, but there are rules and possible costs if you want out early.
• “No deposit needed!” It’s rare, and often means higher payments.

What’s real? PCP does make higher-end cars more accessible. What’s hype? That it’s ‘risk-free’ or ‘always the best deal’. It’s not. It’s a tool—useful in the right hands.

Pros & Cons

Pros	Cons
Lower monthly payments	Balloon payment at the end
Flexibility to swap cars	Mileage & condition restrictions
Access to better cars	Can cost more overall
Fixed monthly outgoings	Early exit penalties
No need to own the car	Car isn’t yours until final payment

Weigh them up. PCP’s not for everyone, but for the right driver, it’s a winner.

Other Options to Consider

PCP isn’t the only game in town. Here are alternatives worth a look:
• Hire Purchase (HP): Pay higher monthly instalments, own the car at the end. No balloon payment, no faffing around.
• Personal Loan: Borrow from your bank, buy the car outright. You own it from day one, which means you can modify it, sell it, or paint it pink—no one cares.
• Leasing: Like a long-term rental. Cheaper monthly payments, but you never own the car. Good if you’re a serial car swapper.
• Cash: The old-fashioned way. No interest, no contracts, but you need the full amount upfront (and a mattress to hide it under).

Match the finance to your life, not just your dream car.

FAQs

Q: Can I get PCP on any used car? A: Not always. Cars usually need to meet age and mileage limits. Super-old bangers? Unlikely. Low-mileage, recent models? More likely.

Q: What happens if I go over the mileage limit? A: Expect to pay a penalty, usually per mile. Sometimes enough to make you wish you’d taken the bus.

Q: Do I have to buy the car at the end? A: Nope. You can pay the balloon payment and keep it, hand it back, or use it as a deposit on another deal.

Q: Is servicing included? A: Rarely. You’re responsible for keeping the car in good nick. Skip servicing, and you’ll pay for it later.

Q: Can I end the agreement early? A: Yes, but check the small print. You might have to pay a settlement fee, and it could cost more than you think.

Q: What’s the catch with 0% APR deals? A: They’re rare, often limited to certain cars, and can hide higher prices elsewhere. If it sounds too good to be true, it probably is.

Next Steps / Call to Action

If you’re thinking about a used car and PCP sounds like your ticket, don’t jump in blind. Compare deals, read the fine print, and talk to a broker who’ll give you the full story—warts and all. At Kandoo, our team is ready to steer you straight. Click below, and let’s find you a car finance deal that actually works in the real world—not just on paper.