Top 10 Best Cars for PCP Finance: Luxury Within Reach

What Is Personal Contract Purchase (PCP) Finance?

Personal Contract Purchase (PCP) finance is a flexible option for owning a car. It allows you to make manageable monthly payments. With this agreement, you can enjoy a new car without having to pay the full cost all at once. The agreement has three parts: a deposit, monthly payments, and an optional final payment at the end of the deal, which is called a “balloon payment.”

How Does a PCP Agreement Work?

When you start a PCP agreement, the total price of the car is divided into three sections. First, you have the initial deposit. Next, there are fixed monthly payments. Finally, there is an optional final payment, known as a balloon payment. This setup allows buyers to keep costs low while in the agreement. It also gives you the chance to decide what to do with the car at the end of the deal.

Many manufacturers and dealerships give PCP deposit contributions as a way to attract customers. These funds help lower your initial costs. This makes it easier for you to begin your PCP agreement. For instance, a dealership may provide a £1,000 deposit contribution. This offer can reduce the down payment you have to make.

Key Features of PCP Finance

• Lower Monthly Payments: With an optional final payment, you pay less each month for your car.
• Flexible End-of-the-Agreement Options: You can return the car, make the balloon payment to buy it, or trade it for a new car.
• Mileage Allowance: Set your own mileage limit, usually between 8,000 and 12,000 miles per year.
• Deposit Contributions: Many dealerships help you by giving large deposit contributions. This means you pay less upfront.
• EV Incentives: Buyers of electric vehicles can get discounts or perks, like a free Ohme home charger worth hundreds of pounds.

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Popular Categories of Cars for PCP Finance

Electric SUVs: The Future of Driving

Electric SUVs are becoming more popular. They are good for the environment, cost less to run, and have modern technology. The Tesla Model Y and the Kia Niro EV are great options. The Tesla Model Y has a long-range single motor version. It provides strong performance and a great range, which is ideal for families and daily commuters. The Kia Niro EV is also practical and priced competitively for an electric SUV. Many car makers offer benefits, such as deposit PCP contributions and discounts for people who buy EVs.

Compact and Budget-Friendly Options

For buyers looking for affordable choices, some great options are the Toyota Aygo X, Renault Clio, Dacia Sandero, and Dacia Duster. These cars are perfect for city driving or for a first car because of their low monthly payments and easy size. The Toyota Aygo X stands out with its modern look and tech features. On the other hand, the Dacia Duster gives you strong performance at a great price.

Luxury SUVs and Sedans

For people focusing on luxury and performance, PCP finance can help you access high-end cars. The Range Rover Velar and the Range Rover offer great comfort and are good for off-road driving. If you like Mercedes, the Mercedes GLE, Mercedes GLB, Mercedes GLA, and Mercedes CLA models all blend style, strong performance, and nice features.

Mid-Size SUVs and Crossovers

The Cupra Ateca is a sporty mid-size SUV. It attracts drivers who want both practical features and great performance. Another option in this group is the Outgoing Ford Kuga. As dealerships make way for newer models, the Kuga often offers good PCP deposit contributions.

Top 10 Cars to Buy with PCP Finance in 2024

1. Nissan Leaf

• Estimated Monthly Payment: £350 (Typical APR: 5.9%)
• Initial Deposit: £2,500
• Optional Final Payment: £10,000
• Mileage Allowance: 10,000 miles a year

Pros:

• A long range and low costs make it a great option for drivers who care about the environment.
• It includes advanced features to help drivers.

Cons:

• Costs more at the start than other electric cars.

2. Skoda Fabia

• Monthly Payment: £200 (Average APR: 6.5%)
• Deposit Required: £1,500
• Possible Final Payment: £5,500
• Yearly Mileage Allowance: 10,000 miles

Pros:

• A small car that is compact, dependable, and easy on the wallet.
• It offers a roomy interior for its size.

Cons:

• Does not have some advanced features that competitors offer.

3. New Suzuki Swift

• Estimated Monthly Payment: £190 (Average APR: 6.9%)
• Initial Deposit: £1,200
• Optional Final Payment: £4,800
• Mileage Allowance: 9,000 miles each year

Pros:

• Prices are low and emissions are small.
• Great for driving in the city and has good fuel savings.

Cons:

• Limited boot space.

4. Land Rover Discovery Sport

• Estimated Monthly Payment: £600 (APR: 5.9%)
• Initial Deposit: £4,500
• Optional Final Payment: £22,000
• Mileage Allowance: 12,000 miles a year

Pros:

• A luxury SUV that can go off-road.
• A roomy inside with a choice for seven seats.

Cons:

• Higher running costs compared to smaller SUVs.

5. Alfa Romeo Junior

• Monthly Payment Estimate: £280 (APR: 7.5%)
• Starting Deposit: £2,000
• Optional Final Payment: £8,000
• Yearly Mileage Limit: 10,000 miles

Pros:

• The design is sporty and it drives fun.
• It is a stylish choice compared to regular compact cars.

Cons:

• Smaller rear seats and boot.

6. Dacia Spring

• Estimated Monthly Payment: £150 (APR: 7.9%)
• Initial Deposit: £800
• Optional Final Payment: £3,500
• Mileage Allowance: 10,000 miles per year

Pros:

• A very cheap electric car available today.
• Great for short trips and driving in the city.

Cons:

• Limited range compared to other electric cars.

7. VW ID.3

• Estimated Monthly Payment: £360 (APR: 6.0%)
• Initial Deposit: £3,000
• Optional Final Payment: £14,000
• Mileage Allowance: 10,000 miles each year

Pros:

• A modern design with a great electric vehicle range.
• Great tech features and a smooth driving experience.

Cons:

• Monthly payments are a bit higher than those of competitors.

8. Mercedes GLC

• Estimated Monthly Payment: £750 (Representative APR: 5.5%)
• Initial Deposit: £5,000
• Optional Final Payment: £28,000
• Mileage Allowance: 12,000 miles per year

Pros:

• A stylish and luxurious mid-size SUV.
• It offers a great ride and has advanced features.

Cons:

• Premium price tag.

9. Ford Explorer

• Estimated Monthly Payment: £550 (Representative APR: 6.0%)
• Initial Deposit: £4,000
• Optional Final Payment: £20,000
• Mileage Allowance: 12,000 miles per year

Pros:

• A big SUV with plenty of room for families.
• Full of features for fun road trips.

Cons:

• Higher running costs due to size and engine.

10. Cupra Born EV

• Monthly Payment: £400 (APR: 5.9%)
• Initial Deposit: £3,000
• Final Payment (if you choose): £16,000
• Mileage Allowance: 10,000 miles per year

Pros:

• A design that catches your eye and the electric vehicle range.
• A lively performance with sporty handling.

Cons:

• A smaller network of dealerships than mainstream brands.

New and Emerging Models

Emerging brands, such as GWM Ora Pro, are bringing in low-cost electric cars. This is making the PCP market more diverse. The Cupra Ateca and Renault Clio are still popular picks. They offer a good mix of low price and smart features.

Additional PCP-Eligible Cars to Consider

• Fiat Panda: A small and affordable car. It is great for city driving and has low monthly payments.
• Jeep Grand Cherokee: A strong SUV that can handle off-road driving. It also has luxury features.
• GWM Ora Pure: A low-cost electric car. It comes with great perks like free home chargers.
• BYD Seal U DMI: A modern electric vehicle. It offers a long range and smart features.
• New MG HS: A well-equipped SUV with good PCP deals.
• New Ford Capri: A fresh take on a classic car. It’s great for PCP buyers who want style.
• KGM Tivoli and KGM Torres: Budget-friendly SUVs that are very practical for families.

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How Does PCP Compare to Hire Purchase?

Personal Contract Purchase (PCP) and hire purchase are both common ways to finance a car. However, they are different in how they are set up and how flexible they are.

• PCP Finance: This lets you make lower monthly payments. At the end of the deal, you can choose to make a final payment to own the car.
• Hire Purchase: This requires higher monthly payments. You pay off the full cost of the car during the agreement. After the last payment, the car belongs to you automatically.

If you want to spend less each month and have more choices, PCP might be the right option for you. But if you prefer to own the car completely and don’t want to think about limits on miles or big end payments, hire purchase could be a better fit.

Key Considerations at the End of the Agreement

At the end of the agreement, you need to check the car’s condition. This is important to prevent extra fees. Manufacturers look at the car for fair wear and tear. They make sure it meets acceptable limits. If you exceed the mileage allowance or return the car with too much damage, you may face additional charges.

The Role of Deposits in PCP Finance

A bigger deposit can lower your monthly payments. It can also cut down the total interest you pay over the loan period. For instance, luxury cars like the Range Rover Velar and Mercedes GLE usually need larger deposits. However, you might get help from dealership offers, like deposit PCP contributions, to help with this cost.

Correct as of 27/11/24

FAQ’s About PCP Car Finance