Personal contract purchase explained
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to give you a clear understanding of who each funding option is suited to1. Full details of personal contract purchase
Personal Contract Purchase, also known as PCP, enables the individual, rather than the organisation, to lease a vehicle over a set period of time and with fixed monthly costs.
This type of scheme means there is no Benefit In Kind taxation to pay and the driver has a greater level of choice, as they can trade up or down from their current company car level and pay more or less per month as appropriate.
With Personal Contract Purchase the employer can benefit from a reduction in the gross cost of providing drivers with a vehicle. However this is strongly influenced by the make up of the fleet and in particular the number of business miles conducted by a driver. Generally speaking, drivers need to be in the 10,000+ business miles bracket for this to be an effective choice.
To find out whether you should offer a Personal Contract Purchase scheme, call us now on 0870 224 2772 and we can help you make the decision that's right for you.
2. Key benefits of personal contract purchase
- Personal Contract Purchase allows for accurate monthly budgeting
- Personal Contract Purchase provides improved cash flow
- Personal Contract Purchase ensures you have a minimum capital expenditure
- Personal Contract Purchase provides a fixed interest rate
- Personal Contract Purchase ensures ownership of vehicle
- Personal Contract Purchase ensures no depreciation risks
- Personal Contract Purchase ensures no vehicle disposal problems
- Personal Contract Purchase provides reduced administration
- Personal Contract Purchase provides on-going advice/support
- Personal Contract Purchase means that road fund license is provided
- Personal Contract Purchase provides breakdown rescue cover
- Personal Contract Purchase ensures fixed charge maintenance
- Personal Contract Purchase means that VAT is chargeable on services
- Personal Contract Purchase means that VAT is recoverable on services
- Personal Contract Purchase provides optional GAP insurance
3. Your options at the end of the contract
Do you want to purchase the vehicle?
Your Purchase price is detailed in the contract. Please confirm 28 days prior to the end of the contract if you wish to take up tis option. We will then collect the amount by Direct Debit.
You must return the vehicle to Network
Contact your Network franchisee to arrange collection of the vehicle. Please note, 72 hours notice is required.
When the vehicle is collected from you, please ensure you receive a copy of the hand-over appraisal form. Your Network franchisee will be pleased to review your options for your next contract.