Refinancing a PCP Agreement

Personal Contract Purchases (PCP) is a very common way of purchasing a vehicle. You pay your monthly payments, and at the end of the term, you have the option to pay a final lump sum ‘balloon payment' that will allow you to keep the car.

During a lease-purchase agreement, you may find that your payments could be reduced with lease purchase refinancing due to inflation rate drops for instance. We work closely with specially chosen lenders to help you secure the best deal.

What is a PCP Agreement?

A Personal Contract Purchase (PCP) is a way to pay for a car and is much like a long-term rental, allowing you to use the car until the contract ends. At the end of the contract, you have 3 options:

• return the car
• pay the resale value and keep it
• use the resale value towards buying a new car.

There are a number of things to know about PCP agreements including

• Agreements that usually last three to five years
• There will be a credit check that needs to be passed
• a deposit upfront must be paid
• the total amount you will pay back is often higher than a PCH.
• you won't own the vehicle at the end of the agreement; however, you can buy it by paying a 'balloon payment', which is normally a few thousand pounds
• there are strict terms in the agreement, like mileage limits
• you'll often need to stay with the same dealer to be able to use any remaining equity in your car as a deposit for a new car through PCP.

How Does Refinancing a PCP Work?

Refinancing your vehicle will involve a new lender taking over the ownership of the vehicle and your payments switching to this new lender.

Refinancing a PCP will usually involve paying the settlement fee on your current agreement, which ends your existing contract with your current lender and transfers ownership to a new lender.

The Benefits of PCP Refinancing

There are many benefits to refinancing PCP agreements, which include:

• Lowering monthly payments
• Shortening or extending the agreement terms
• Reduce and refinance PCP balloon payments
• Renegotiate mileage allowances

How Broker4Cars Can Help Refinance Car PCP Payments

Our specialist vehicle refinancing team can help you refinance PCP car payments. Simply get in touch with our team and we will help you with the process to refinance a lease-purchase with one of our lender partners.