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Made in the UK · Figures for the 2026/27 tax year

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PCP Car Finance · 5 min

The monthly payment is low because the bill is at the end.

PCP deals only pay off part of the car. The rest is a big final payment, and until you pay it, the car isn't yours.

£4,300

more than the cash price, on a £25,000 car you keep.

The 10-second version

  • 3choices at the end: hand it back, pay up and keep it, or part-exchange.
  • 5-15pper mile typically charged if you go over your limit.
  • 50%paid off, and you have the right to hand the car back.

A PCP is a long rental with an option to buy.

Here's what a £25,000 car looks like on a typical deal.

A £25,000 car on PCP

  • Deposit: £2,500

    Paid upfront.

  • 48 × £329

    Four years of monthly payments.

  • Final payment: £11,000

    Only if you want to keep the car.

Keep it and you pay £29,292 in total. Hand it back and you pay £18,292.

How do you use a car?

Pick one. PCP is a better fit for some people than others.

Look at the total, not the monthly.

The same £25,000 car, three ways to pay.

  • PCP, hand back

    £18,292

    £2,500 + 48 × £329

  • Pay cash

    £25,000

    you own it from day one

  • PCP, keep it

    £29,292

    plus the £11,000 final payment

Illustrative figures. Handing back means you own nothing at the end, so it isn't a like-for-like comparison.

Congrats, you made it to the end!

Ready to dive deeper? The full PCP Car Finance guide has the mechanics, worked examples and fine print.

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