What is Personal Contract Purchase (PCP)?
Personal Contract Purchase is a popular and affordable way to drive away in a brand new Lexus with only low monthly repayments to be made. Such a scheme requires you to pay a deposit followed by fixed payments over an agreed time period. At the end of this term, you can pay an optional final payment to take ownership, or return the vehicle with nothing more to pay.

What are the advantages of PCP?

  • A PCP agreement means you’re only paying for the depreciation of a vehicle’s value from the sale price to the Guaranteed Future Value, as such meaning monthly payments are lower
  • You have the flexibility to simply return the car and walk away at the end of the contract term
  • If the vehicle is worth more than the Guaranteed Future Value, you will be able to use this difference as a deposit on another car

What should you consider when opting for PCP?

  • That you are happy to return the vehicle to the dealership at the end of the agreed term
  • Should you wish to own outright, you will be required to pay an optional balloon payment at the end of the contract - this is the Guaranteed Future Value figure
  • You will be unable to sell the car until you’ve settled the agreement
  • You will be obliged to uphold the maintenance and servicing requirements detailed within the agreement terms

Can I settle my PCP agreement early?

Yes. By contacting the finance company, you will be able to obtain an early settlement figure. Note, however, that you may also be required to pay the difference between the vehicle’s value and what you still owe - a figure known as negative equity.

What is Hire Purchase (HP)?
A traditional form of vehicle financing that makes it easy and affordable to buy, Hire Purchase simply requires you to pay an initial deposit followed by fixed monthly payments. These payments - made over an agreed period of time - will be paying off the balance remaining, resulting in full ownership once all repayments are complete.

What are the advantages of HP?​

  • Spread the cost of a new or used car over a number of months
  • Complete vehicle ownership at the end of the agreement
  • No mileage restrictions

What should you consider when opting for HP?

  • Payments may be more expensive in comparison to a PCP agreement
  • Selling the vehicle cannot be completed until the finance is settled
  • Ownership of the car becomes yours only once all payments are settled
  • Servicing and maintenance needs to be upheld according to the terms of the agreement

Can I settle my HP agreement early?

Yes. Simply get in touch with your financing company and request a settlement figure. This will also include any negative equity that may be applicable - i.e. the difference between the value of the car and how much you have remaining to pay.

What product is best for me?

Understanding the different types of vehicle financing is easy. However, if you still wish to discuss the options further, a member of the sales team at RRG Lexus will be delighted to answer any questions you may have. We’ll highlight the various solutions available to you and ensure you’re able to drive away for the best price possible. Get in touch with us now for more details.