PCP or Contract Hire (PCH) what is right for me?

PCP or Contract Hire

What is right for me?

At Vauxhall Finance you can get into a new Vauxhall by using our PCP or Contract Hire products. Read below to compare the advantages and disadvantages of each product and work out which is the right option for you.

Don't forget, we also offer Conditional Sale finance as an alternative. 

WHAT IS PCP?

PCP (Personal Contract Purchase) is a finance product where you pay a deposit at the start of the agreement, followed by fixed monthly payments for the rest of the contract. You will also need to tell us your anticipated mileage, and any additional miles above this will be charged per mile if you hand back the vehicle.

A Guaranteed Future Value is set on your vehicle. This is the minimum value you will expect to get for the car at the end of the contract if you hand it back or use it as a part-exchange on a new Vauxhall (subject to mileage and condition checks). With PCP you are effectively paying the expected decline in value of the vehicle over the length of the contract plus the interest on the amount financed. 

PCP contracts are popular with those that like to get behind the wheel of a new car every few years. Monthly payments under a PCP contract tend to be lower than with Conditional Sale. 

To own your car outright and keep it after the contract, you will need to pay the Guaranteed Future Value to us, and you won't have to pay charges for excess mileage or damage. 

What is Contract hire? 

At Vauxhall Finance we offer a product called Contract Hire which is a long-term hire agreement. You will pay an advance rental period upfront and then a fixed monthly payment for the rest of the contract. Again, you will also set the mileage you expect to do in the car upfront. Any excess mileage will be payable at the agreed rate.

At the end of the contract you must hand your car back. If it applies, you will need to pay for any damage caused to the vehicle and any excess mileage. 

PCP v contract hire comparison


The below table explains the key differences and similarities between the Contract Hire and PCP products available at your local Vauxhall retailer.

PCP
Contract Hire 
New Cars


Used Cars


Upfront Payment


Monthly Payments


Damage Charges
 †

Excess Mileage Charges
 †

Depreciation Risk


Road Tax Included


Option to Buy
 *

Maintenance Package

 **


* If you pay the Guaranteed Future Value you will take ownership of the car at the end of the contract.
** A maintenance package is available for an additional fee
† Damage and excess mileage are only payable if the vehicle is handed back

What happens at the end of my agreement? 


CONTRACT HIRE 


At the end of your agreement you must hand your car back to the dealership and your vehicle is subject to mileage and condition checks.

PCP

With PCP you have three options at the end of your contract. You can either choose to hand your car back with no fees to pay (subject to mileage and condition checks), use your car as a part-exchange against a new Vauxhall or alternatively you can pay off the final payment (Guaranteed Future Value) and ownership will automatically transfer to you. Paying off the GFV is the default option if you don't let us know before the end of the contract. 




ARE MAINTENANCE PACKAGES AVAILABLE? 

Maintenance packages at Vauxhall Finance
If you are buying a new car you will be already protected against unexpected issues for the duration of the manufacturer's warranty. You may also have rights under the Consumer Rights Act 2015. 

CONTRACT HIRE 

With a Contract Hire agreement you can opt to pay an additional monthly fee for a maintenance package. This covers you for servicing throughout your contract and also if new tyres are required due to wear and tear. 

PCP

A maintenance package is not available on PCP. You will be responsible for maintaining the vehicle throughout the contract and returning it in an appropriate condition.  

IS ROAD TAX INCLUDED? 


Whether you pay road tax, or Vehicle Excise Duty (VED) depends on what type of contract you are on.

CONTRACT HIRE

With a Contract Hire agreement, road tax is already included in your payments. 

PCP

As PCP is a finance agreement, you will be responsible for paying the road tax on the vehicle. 

DOES IT INCLUDE INSURANCE?

Does my car finance agreement include insurance?

PCP and Contract Hire agreements don't include your normal car insurance. For both types of agreement, you must keep the vehicle insured for its full replacement value under a comprehensive policy of insurance.

RE-Fresh

If you wish to insure your car against cosmetic damage, we offer an optional cosmetic warranty called Vauxhall Re-Fresh. Find out more about Re-Fresh here.

GAP Insurance

If your car is stolen or involved in an accident, GAP insurance will provide you additional cover to make up any shortfall owed to us. Find out more about GAP insurance.

How about for business? 


LEASING/CONTRACT HIRE

Business Contract hire (BCH) is available through our partner Free2Move. Your quote is typically excluding VAT as this can be claimed back if you are VAT registered. You can also offset the cost against taxable profits. We also offer another product called Business Lease or sometimes referred to as Finance Lease.

PCP

PCP for business is also available from your local Vauxhall retailer. It could also qualify for capital allowances. 

Please seek independent tax advice to see which finance product is right for your business.