What is personal contract purchase (PCP)?

A personal contract purchase (PCP) is a flexible way to finance a car. It’s a loan that typically offers lower monthly payments than other financing options like personal loans or hire purchases. This is because you don’t have to pay the full value of the car unless you’d like to own it. At the end of the agreement, you’ll only own the car if you make an optional final payment, also often called a balloon payment. Similar to hire purchases, even if you choose to return the car, you’ll pay interest on the full value of the car minus your deposit. We'll agree a mileage limit with you based on how many miles you expect to drive for the duration of the PCP agreement. If you go over the limit, you’ll need to pay an excess mileage fee when the agreement ends. You’ll have three options to consider at the end of the agreement, which is helpful if your circumstances change: Pay the final payment to own the car outright Part exchange the car for a new one with a new PCP agreement Hand the car back to us Example You’d like to finance a £10,000 car over three years with PCP. You plan to drive a total of 30,000 miles over the course of the agreement, so Zopa guarantees that the car will be worth at least £4,000 after 3 years and sets this as the optional final payment. You decide to put down a 10% deposit (£1,000) and finance the rest (£9,000). Since it's been agreed that the car will be worth £4,000 at the end, you’re only required to repay £5,000 (plus the interest on the entire £9,000) over the 3-year period. At the end of the agreement, if you’d like to keep the car you can pay the optional final payment of £4,000. If you don’t want to keep the car, you can hand it back and take out a new PCP agreement, or just hand it back and take no further action.

What cars can I get with PCP finance?

We accept most cars, as long as it’s: A used car Bought through an approved dealership No more than 5 years old Has under 70,000 miles at the start of the agreement Done no more than 150,000 miles at the end of the agreement (To work this out, take the mileage on the car at the start of the agreement and add on your agreed total mileage) Not a commercial vehicle If you’re unsure whether your car fits our criteria, you can share the car’s registration number and we’ll check for you during the application.

How do I return my car at the end of a PCP agreement?

At the beginning of your personal contract purchase (PCP) agreement, we’ll outline the options you have when your contract ends. We’ll also send you regular reminders to make sure you understand your options and know what to do at the end of your agreement. If you decide to return the car to us, please get in touch with our support team using the details here to arrange the return. Once we’ve received the car, our logistics partner will inspect its condition and check the mileage. If you’ve stuck to the agreed mileage limit and the car’s in good condition, we’ll contact you to confirm the end of your PCP agreement. If you’ve gone over the agreed mileage limit, we’ll apply a charge per excess miles. You’ll also need to pay for any damage that falls outside of the British Vehicle Rental and Leasing Association (BVRLA) Fair Wear and Tear guidelines.

Can I change my repayment date for PCP finance?

Yes, you can, but in rare instances this could incur a 'depreciation charge'. We’ll apply this charge if the car’s value is lower than our estimate because you return it later than the original schedule. You can check out this guide to find out more about how to change your personal contract purchase (PCP) repayment date and what to expect next.

Why does my term have an extra month?

The optional final payment will be automatically collected in the extra month. This means that if you'd like to own and keep the car you don’t need to worry about getting in touch with us. We’ll send reminder emails months ahead of the end of the agreement to confirm whether you’d like to go for a different option. If you plan to return the car to us, the extra month should give you enough time to hand the car back and settle any excess charges should there be any. For example, a 49-month term consists of: 48 months of regular payments 1 month where the optional final payment can be made If you decide to return the car to us at the end of your agreement, just let us know.

What happens if I go over my agreed mileage?

At the beginning of your personal contract purchase (PCP) contract, you'll need to agree to a mileage limit over the term of the agreement. The higher your agreed mileage limit, the higher your monthly payments. This is because a higher-mileage car will likely be worth less when it’s sold, which increases the difference in value between the car’s price at the start of the agreement and its estimated value at the end – a key factor in determining your monthly payments. On the flip side, if you set your mileage limit too low and go over it, you could end up with excess mileage fees when you hand the car back to us at the end of your agreement. This is why it’s important to work out your annual mileage as it’ll help you pick a reasonable mileage limit and avoid excess mileage charges. Keep in mind that the mileage is only checked at the end of your agreement and not each year. This means that you can go over the limit in one year if you make up for it by travelling fewer miles in subsequent years.

What are my options at the end of a PCP agreement?

At the end of your personal contract purchase (PCP) agreement with Zopa, you’ll have three options to choose from: Buy the car – If you want to keep the car and become its owner, you’ll need to pay the optional final payment. Return the car to us – If you no longer need a car, simply hand it back to us after you’ve made all your monthly payments. You’ll need to make sure that the car doesn’t have any damage beyond normal wear and tear, and that you’ve stuck to your agreed mileage limit. Otherwise, you’ll likely face additional charges. Part exchange the car for a new one – If you want a fresh set of wheels, you can return the car and start a new PCP agreement with another car. If the car’s worth more than the optional final payment, you’ll have some extra money that you can put towards the deposit on your next car.

What’s the optional final payment?

The optional final payment is made at the end of a personal contract purchase (PCP) finance agreement in order to own the car. It's sometimes referred to as the balloon payment or the guaranteed future value (GFV).

Does Hire Purchase finance cover all cars?

We accept most cars, as long as it’s: A used car Bought through a dealership No more than 10 years old Not a commercial vehicle Got no more than 120,000 miles on the clock If you’re not sure whether your car fits our criteria, just enter the car’s registration number and we’ll check it for you.

Why do you complete a check on the dealer?

We want to ensure that you have the smoothest journey and drive away in your car happy. That’s why we complete additional checks on dealerships to make sure they are up to our standards and are a reliable and reputable company.

What happens if I don’t know the registration?

We’ll need a registration plate for your application so it’s best to call your dealer to get this. Your quote is valid for 60 days, so you’ve got plenty of time to find your dream car and you can check as many cars as you like, with no impact to your credit score.

Can I make extra repayments towards my hire purchase finance?

Yes. If you want to pay more towards your hire purchase finance, you can, at any time. And without fees. The easiest way to pay more is by using the Zopa app. Click your hire purchase finance, then ‘Make an extra payment’ and follow the steps. We’ll take the money through your usual Direct Debit. Things to keep in mind ● Paying more will reduce your hire purchase finance amount, the amount of interest you pay and the cost of your monthly repayments. ● Your hire purchase finance term will stay the same. ● You’ll need to pay at least £10. ● If one of your regular repayments is going through, you’ll need to wait a few days until that’s cleared before making an extra repayment.

Can I re-finance / change my car whilst the finance is up and running?

No, not once you’ve signed your agreement as this relates to the car you buy with the hire purchase finance. However, see here for more information on selling or part-exchanging the car.

I’m having problems with my car

We’re sorry to hear that there is an issue with your car. Please get us touch with us at zopa.com/help and a member of our customer service team will look into ways we might be able to help.

Can I take my car abroad?

If you’re looking to take the car out of the UK for more than 28 days, it’s really important to contact us before you go, to receive written consent. You’ll need AA five star insurance or equivalent to take the car out of the UK to any European country.

Can my spouse/ child drive the car?

Yes, they can, providing that they’re insured to drive it. Don’t forget, no matter who is driving the car, the person whose name is on the contract is liable for the hire purchase finance.

When do you complete a hard search on my credit file?

Zopa will conduct a hard search on your credit file once you complete your e-sign. The initial quote you receive will be a soft search, leaving no mark on your credit file.

Can I add a personalised number plate to my car?

Yes, you can! Though it’s important to note that you can’t make any permanent modifications to the car.

Yes, you can! It’s important to note that as the hire purchase finance is registered in your name, you’ll be liable for the finance until it has been settled. Contact us at zopa.com/help to request a finance settlement figure. Make sure that the dealer has the correct bank account details and reference. You can find these details by contacting our customer service team.

I want to sell my car

Before selling your car privately, your existing hire purchase finance agreement with us will have to be settled first, as Zopa will still own the car. If you’re part-exchanging the car, the dealer will often pay us directly, but you’ll be liable for the finance until the loan is closed. Please make sure that the dealer has the correct bank details and reference. Feel free to contact us to obtain the details. If you’re in financial difficulty and want to sell the car to reduce your debt, please contact us by going to zopa.com/help.

Technically, we’ll own the car until you’ve paid off your hire purchase finance in full, but there’s no need to feel like it isn’t yours. You'll be the registered keeper of the car and there is no limit on how many miles you drive. Plus, once you’ve made your final repayment, ownership is automatically transferred to you.

Is there a balloon payment?

No. A balloon payment is a lump sum you’ll pay if you want to keep the car at the end of a personal contract purchase (PCP). As this is a Hire Purchase (HP) finance, once you’ve made your final repayment the car is all yours and there’s nothing more to pay.

Are there set-up fees, early repayment fees or late payment fees?

Nope. You can pay off your hire purchase early anytime, with no fee. Although if you miss a repayment it’ll be marked on your credit file which may affect your ability to gain credit in the future.

What's the difference between an unsecured car loan and hire purchase car finance?

With hire purchase finance, the loan is secured against the car. This means that Zopa own the vehicle until the loan has been paid off. We also offer unsecured personal loans as another way of financing a car- check out your rate on our loans page.

How soon could I be driving away in my new car?

Once your Hire Purchase finance is approved and you’ve chosen a car, you could be on the road in as little as one working day.

What background checks does Zopa run?

We’ll need to run some free background checks on the car you like. After all, buying a used car can be daunting, especially when it is often hard to tell whether you’re getting a good deal. We’ll check the car isn’t stolen, imported, scrapped or previously involved in an accident. If any of these fail, you’ll need to add a new car.

Once you’ve signed your agreement online, we’ll then pay the dealer, so you’re free to hit the road. You’ll need to pay the car’s deposit and any extras to the dealer directly.

What is hire purchase finance?

When you choose Hire Purchase finance with Zopa, it's secured against the car. This means we own the car until you make your final repayment and after that, it’s yours. However, there’s no need to feel like it isn’t yours. We won’t put a limit on how many miles you can drive in your car. It’s important to note that if you default on your finance, we can repossess and then sell the car, subject to meeting the conditions detailed in the Consumer Credit Act.

What does pre-approved mean?

Being pre-approved for our Hire Purchase finance means that we’re confident we can say “yes” based on the info you’ve given – we just need to run some final ID and fraud checks. You can also customise your finance term and amount with no impact to your credit score, as your Hire Purchase finance isn’t final until you’ve signed your agreement. Though it’s worth noting that we can’t guarantee you’ll be pre-approved for a new amount if it’s more than you originally applied for.

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Car finance

Find answers to our most frequently asked questions.

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Car finance – getting started

What is personal contract purchase (PCP)?
What cars can I get with PCP finance?
How do I return my car at the end of a PCP agreement?
Can I change my repayment date for PCP finance?
Why does my term have an extra month?
What happens if I go over my agreed mileage?
What are my options at the end of a PCP agreement?
What’s the optional final payment?
Does Hire Purchase finance cover all cars?
Why do you complete a check on the dealer?
What happens if I don’t know the registration?
Can I make extra repayments towards my hire purchase finance?
Can I re-finance / change my car whilst the finance is up and running?
I’m having problems with my car
Can I take my car abroad?
Can my spouse/ child drive the car?
When do you complete a hard search on my credit file?
Can I add a personalised number plate to my car?
Can I part exchange?
I want to sell my car
Will I own the car?
Is there a balloon payment?
Are there set-up fees, early repayment fees or late payment fees?
What's the difference between an unsecured car loan and hire purchase car finance?
How soon could I be driving away in my new car?
What background checks does Zopa run?
Who pays the dealer?
What is hire purchase finance?
What does pre-approved mean?

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