PCP Agreement and Servicing: Everything You Need to Know
If you are looking to finance a new car, you may have come across the term PCP or Personal Contract Purchase. This is a popular car financing option that allows you to spread the cost of buying a car over several years. In this article, we will take a closer look at PCP agreements and servicing, including how they work, their benefits and drawbacks, and how to keep your car in good condition.
What is a PCP agreement?
A PCP agreement is a type of car financing that involves paying for a car in monthly instalments over a set period, typically two to four years. At the end of the agreement, you have the option to either return the car or pay a final lump sum to own it outright. PCP agreements are particularly popular among those who want to drive new cars every few years and are willing to pay a higher monthly cost for the privilege.
How does PCP servicing work?
When you take out a PCP agreement, you will be given a mileage limit for each year of the agreement. This means that you need to keep an eye on how much you are driving, as exceeding the limit can result in extra charges at the end of the agreement. Additionally, PCP agreements often require you to keep the car in good condition, as any scratches, dents or damage may also result in additional charges.
To ensure that your car is in good condition, you will need to take it for regular servicing. This involves taking your car to an approved dealership or garage, where a mechanic will carry out a range of checks and maintenance tasks, such as oil changes, tyre rotation, and brake inspections. Regular servicing can help to catch any potential problems early on, which can save you money in the long run by preventing more serious issues from developing.
Benefits and drawbacks of PCP agreements and servicing
One of the main benefits of a PCP agreement is that it allows you to drive a new car without having to pay for it outright. Additionally, the monthly payments are often lower than other forms of car finance, such as hire purchase or personal loans. PCP agreements also offer flexibility at the end of the agreement, as you can choose to either return the car or keep it.
However, PCP agreements do come with some drawbacks. For example, you will need to keep an eye on your mileage and keep the car in good condition, or you may face extra charges at the end of the agreement. Additionally, the final lump sum payment to own the car outright can be quite high, which may not be affordable for everyone.
Keeping your car in good condition
To ensure that your car remains in good condition throughout the PCP agreement, it is important to follow the manufacturer`s recommended servicing schedule. This will involve taking the car for regular services at an approved dealership or garage, as well as carrying out basic maintenance tasks such as checking the oil level, tyre pressure, and brake pads. Additionally, it is important to avoid driving the car in a way that may cause unnecessary wear and tear, such as harsh braking or rapid acceleration.
In conclusion, PCP agreements and servicing can be a great way to finance a new car. However, it is important to understand the terms and conditions of the agreement, as well as the requirements for keeping the car in good condition. By following the manufacturer`s recommended servicing schedule and taking care of your car, you can ensure that it remains in good condition throughout the agreement and avoid any unnecessary charges at the end.