PCP (Personal Contract Plan) is a flexible Hire Purchase agreement that enables you to have a reduced monthly payment thanks to a Guaranteed Minimum Future Value (GMFV) for your car in 2 or 3 years’ time. Having a GMFV for your car means that you can have a selection of choices at the end of your agreement that suits your circumstances and you don't need to worry about the re-sale value of your Car in 3 years’ time.

You pay a flexible deposit between, minimum 7%. Your car can be accepted as a deposit. Your dealer will agree a GMFV based on your needs and you repay the difference between both. You only pay for the portion of the car that you need. This is how the repayments are kept low. Like any hire purchase agreement you will still fund the car minus the deposit you have paid.

You will have three choices when your PCP agreement comes to an end:

1. Upgrade for a new model
2. Keep the car and make your final payment. Please note you could potentially refinance the final payment
3. Hand the keys back to your dealer

There is a common misconception that you have to return your vehicle to the dealer that you purchased your vehicle off. It is possible for another Dealer to purchase your vehicle and settle the outstanding PCP agreement.

As with all forms of Hire Purchase, until the final payment is made in settlement of the PCP agreement, the car is legally owned by the finance company or bank who funded the car. However your name is on the Log book for tax and insurance purposes.

This is the guaranteed value that your dealer has agreed to buy your car back in 2 or 3 years’ time. This can depend on mileage. This does not mean your car is worth this. Your car could or even should be worth more than that. Please check our valuation for a guide

Providing you return your car in good condition and within the mileage parameters set out in your PCP contact, the value of your car will be protected with the GMFV. However, if your car has bodywork/crash damage or if you have dramatically exceeded your mileage parameters, this could impact on the future value of your car.

At the end of your agreement if you choose to sell your car either to a dealership or privately, the difference between the sale price of the vehicle and the agreed GMFV is known as your equity.

For example:

GMFV = €8,000
Sales Price = €10,000
Equity = €2,000

You can choose to exchange the vehicle, or use the equity, as part of the deposit for a new vehicle.

Yes, you are free to settle your PCP agreement at any time. This will be mean you take ownership of the car earlier. You can also trade in your vehicle for a new one at any point.

PCP is a Hire Purchase product. Hire Purchase is the most common form of car financing. Hire Purchases are regulated under the Consumer Credit act 1995.

Any Car Dealership that sells finance products is obliged to be authorised as a credit intermediary. These are authorised by the Competition and Consumer Protection Commission.

Myth Buster: Any car dealership can agree to purchase your car from you. It is not mandatory to go back to the dealer you purchased it from. There could be equity in your car which contributes to a deposit towards a new or used car.

Myth Buster: A PCP is a form of hire purchase (HP), so you are buying the car over time. It doesn’t officially become your property until the last euro is paid off, just like a classic hire purchase or the mortgage on your house, but you are making payments towards eventual ownership unless you choose not to make the final payment.

Myth Buster: This is another misconception, consumers are often told that they are not borrowing the full value of the car. When you take out a PCP agreement, you are borrowing the whole value of the car, minus any deposit. However, you don’t repay GMFV until the very end, so you have 36 smaller monthly payments followed by one larger payment, that if you choose to keep the car.

Myth Buster: This one isn’t true either. Some people seem to think that if your circumstances change or you can no longer afford your payments, you can simply hand the car back to the dealer or finance company and walk away at any time. PCP works in the same way a traditional hire purchase agreement works.

However there is a clause in all PCP agreement called Voluntary Termination, which allows you, in specific circumstances to terminate the contract. If you have a current PCP finance contract you can check the terms and conditions to understand how this works in greater detail.