PCP car finance calculator

Personal Contract Purchase is a type of car finance which would suit several types of lenders.PCP car finance pic

Whether this finance option is right for you or not would depend on various factors like the type of car that you want to buy, how much amount you are comfortable with paying each month and others.

The newer cars often depreciate quickly and for this reason, PCP finance is better than other types of car finance options.

What is PCP?

PCP is for individuals who wish to take car finance. A plan like this is often defined as conditional sale agreement. It will have a contract term and the borrower has to make monthly payments on the loan.

At the end of the loan term, the borrower would have the option to either return back the vehicle or purchase it by making an additional payment.

The provider of a contract like this would consider various factors when deciding on the monthly payments. Normally, the payments would be decided based on the down payment that you would e paying on the loan, the loan term, the intended mileage and the cost of the vehicle.

The finance rate, the requirements for maintenance and GFMW which is the residual value at the end of the term of the car are also considered. A plan like this can go on for around 24 months to 42 months and the rate is fixed.

A key aspect of PCP car finance is MGFW which is the minimum  guaranteed future value. This is basically an amount which has been decided upon by the buyer of the car and the loan provider. This is also known as balloon payment and it has to be paid at the end of the loan term if the borrower wishes to purchase the car.

PCP car finance calculators

PCP loans are different than the regular car finance options and for this reason, it is a little difficult for the borrowers to understand the monthly payment plans. Each lender would have different interest rates, monthly payment options and terms.

Before you go ahead and sign the documents, it would be necessary for you to know all of these details. One of the easiest ways to get a break up of the monthly payments and to calculate them is by PCP car finance calculators. Using these online calculators, you would be automatically have the quote with you for a particular lender along with the break up monthly plan.

PCP car finance calculators are available at several websites online like Broker4cars.co.uk, Car Finance, Finance4cars and others.