What is PCP?

Personal Contract Purchase (PCP) is a form of finance based on a Hire Purchase (HP) agreement. However, unlike an HP agreement where you pay off the entire value of the bike, you are effectively only paying off the depreciation via your monthly instalments. At the end of the term, you still have a large amount outstanding which is often referred to as the balloon payment. At this point you have several options;

1. Settle the remaining balance and take complete ownership of the bike
2. Refinance the remaining balance via a personal loan or HP agreement
3. Return the bike and your PCP agreement concludes with no balance outstanding
4. Return the bike and use the value as deposit against a new bike under another PCP agreement