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What is Personal Contract Purchase (PCP)?

A Personal Contract Purchase is usually broken up into 3 sections. The first is a deposit. This is then followed by a series of fixed monthly instalments before you have the option to make a final payment (sometimes called a balloon payment) at the end in order to keep the vehicle. Consumers have the choice of returning the car, paying the final payment (which is dependent on resale value) or putting that resale value towards a new vehicle.

Will I be approved for Finance?

Provided your credit score is good, you should have no issues.

Can I get car finance even if I have bad credit?

Usually, yes. However, people with low credit scores are typically considered higher risk borrowers; this can mean stricter eligibility criteria, including higher interest rates.

What is APR?

Annual Percentage Rate (APR) represents the cost of borrowing, including admin fees and interest.

What is the difference between a soft credit search and a hard credit search?

Soft credit search – tests your eligibility for finance and doesn’t affect your credit rating
Hard credit search – used when you apply for finance. If you already have a bad credit score, it could adversely affect your overall credit rating

View Vehicles on PCP

What is Hire Purchase (HP)?

Hire Purchase is a plan where you usually pay a deposit, and then pay off the total vehicle value in monthly instalments. Once you have made your last payment, the vehicle is yours.

Will I be approved for Finance?

If you have a good credit score, there’s no reason why not.

Can I get car finance even if I have bad credit?

There’s a good chance you will but you may not be eligible for the best deals.

What is APR?

APR stands for Annual Percentage Rate and it represents the annual cost of borrowing, including fees and interest.

What is the difference between a soft credit search and a hard credit search?

A hard credit check may negatively affect your credit score if you already have a bad credit rating; a soft credit check won’t impact your credit rating.

View Vehicles on HP

MG Financing Options

Benefits

Benefits of HP
Ownership: You own the car outright at the end of the term with no large final payment. Fixed Monthly Payments: Easy, predictable payments for straightforward budgeting. No Mileage Limits or Condition Charges: No penalties for high mileage or minor wear and tear. Freedom to Modify: You can customise the car without needing to keep it in original condition.

Benefits of PCP
Lower Monthly Payments: You’re only financing the car’s depreciation, making monthly payments cheaper. Flexible End-of-Term Options: Choose to keep, return, or part-exchange the car for a new one. Lower Initial Deposit: Often requires a smaller deposit than HP. Potential Equity: If the car’s value is higher than the GMFV at term-end, put this toward a new car.

Considerations

Things to consider (HP)
Monthly payments tend to be higher compared to PCP (this is because you’re paying off the full value of the car) Until the final instalment is paid, you don’t own the car You’ll need to keep the vehicle suitably insured and maintained until the full value is paid off

Things to consider (PCP)
To own the vehicle, you’ll need to pay the final balloon payment (which is larger than preceding instalments) – this is the vehicle’s guaranteed future value (GMFV) You’ll need to agree on a mileage allowance which, if exceeded, may result in excess mileage charges You’re responsible for insuring and maintaining the vehicle until the final instalment is paid Until all payments are made, the vehicle belongs to the financer

For expert guidance on car financing options like Hire Purchase (HP) and Personal Contract Purchase (PCP), contact Birchwood MG in Eastbourne. Our team can help you find the best plan based on your budget and preferences, including flexible payments and ownership options. Reach out to learn more about financing and current offers. Contact Us

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Company Info

Financial Disclosure

Birchwood Group are a group of companies including Azur Auto Limited, Birchwood Auto Limited and Birchwood Motor Group Limited and are authorised and regulated by the Financial Conduct Authority as Appointed Representatives of Birchwood Garages Limited (Ref No 309454) which is authorised and regulated by the Financial Conduct Authority for Insurance Mediation and consumer credit purposes.

You can check this on the FCA Register by visiting the www.fca.org.uk or by contacting the FCA direct on 0800 111 6768.

As credit broker and not a lender we will provide you with comparable details of firms most appropriate to your lending requirements based on our panel of lenders who may pay us for introducing you to them. We will make a credit recommendation after assessing your requirements.

As an Insurance Intermediary (Broker) acting on behalf of customers and not an Insurer, we do not offer insurance through this website. Please contact us directly if you wish to discuss insurance.