Personal Contract Purchase (PCP) is a finance agreement between an individual and a finance company. After an a initial payment and a series of monthly payments which effectively cover the vehicle's depreciation, this type of agreement gives you the option to purchase the vehicle or return it to the finance company at the end.
At the outset of a Personal Contract Purchase agreement, you select the term and annual mileage, for example, 3 years and 10,000 miles per annum. This will give you a fixed monthly cost, which can help with budgeting and cash flow.
If you wish, you can also choose to include maintenance, which will cover you for routine servicing, MOTs and replacement tyres, and allow you to further fix your motoring costs in advance.
At the end of the contract, you have three options: