PCP for Used Cars: How it Works

Check Your Eligibility in 60 Seconds

Personal Contract Purchase (PCP) is a flexible and affordable way to finance both new and used cars. Here we’ll explore how PCP works specifically for used vehicles, including the benefits, drawbacks, and key considerations. By understanding the details of PCP for used cars, you can make an informed decision that best suits your financial situation.

What is PCP?

Personal Contract Purchase (PCP) is a type of car finance that allows you to make lower monthly payments compared to other finance options, with the flexibility to buy the car, return it, or trade it in at the end of the contract.

How Does PCP Work for Used Cars?

PCP for used cars operates similarly to PCP for new cars, with a few differences. Here’s a step-by-step breakdown of how it works:

  1. Deposit: You pay an initial deposit, typically 10-20% of the car’s value.
  2. Monthly Payments: You make fixed monthly payments over an agreed term (usually 24 to 48 months). These payments cover the car’s depreciation.
  3. Final Balloon Payment: At the end of the term, you can:
    • Pay the final balloon payment to own the car.
    • Return the car with no further obligations (subject to mileage and condition terms).
    • Trade the car in for another vehicle and start a new PCP agreement.

Benefits of PCP for Used Cars

  • Lower Monthly Payments: Compared to Hire Purchase (HP) or personal loans, PCP offers lower monthly payments.
  • Flexibility: At the end of the term, you have multiple options.
  • Access to Better Cars: You can afford a higher-spec used car due to lower monthly payments.

Drawbacks of PCP for Used Cars

  • Mileage Limits: Exceeding agreed mileage can result in additional charges.
  • Condition Requirements: The car must be kept in good condition to avoid extra charges.
  • Final Payment: The balloon payment can be significant if you choose to buy the car.

PCP vs. Other Finance Options

FeaturePCP for Used CarsHP for Used CarsPersonal Loan for Used Cars
OwnershipOptional at end of termAutomatic at end of termImmediate
Monthly PaymentsLowerHigherHigher
DepositUsually RequiredUsually RequiredNot necessarily
Mileage RestrictionsYesNoNo
Final Balloon PaymentYesNoNo

Eligibility for PCP on Used Cars

To qualify for a PCP agreement on a used car, you typically need:

  • A good credit score.
  • Proof of income and employment.
  • A stable UK address history.

For those with bad credit, there are still options available. Check out our bad credit car finance page for more details.

Steps to Apply for PCP on a Used Car

  1. Calculate Budget: Use a finance calculator to determine what you can afford.
  2. Apply: Using our quick application form
  3. Choose a Car: Visit shopping for vehicles to find the right used car.
  4. Submit Application: Apply online or in person with the required documents.
  5. Review Offers: Compare different PCP offers and terms.
  6. Sign Agreement: Finalise the PCP agreement and drive away.

FAQs About PCP for Used Cars

  1. Can I refinance my PCP agreement?
  2. What happens if I exceed the mileage limit?
    • You will incur additional charges based on the excess mileage rate specified in your contract.
  3. Is insurance included in PCP?
    • No, you will need to arrange your own car insurance.
  4. Can I trade in my car at the end of the PCP term?
    • Yes, trading in your car for a new PCP agreement is one of the end-of-term options.


PCP for used cars provides a flexible and affordable way to finance a vehicle, with lower monthly payments and multiple end-of-term options. By understanding how PCP works and considering your financial situation, you can choose the best car finance option for your needs. For more information and personalised advice, explore the resources available at Happy Motor Finance.

Check Your Eligibility in 60 Seconds

used car pcp

PCP for Used Cars: How it Works

Personal Contract Purchase (PCP) is a flexible and affordable way to finance both new and used cars. Here we’ll explore how PCP works specifically for used vehicles, including the benefits,…
Carol St Clair
Carol St Clair
Absolutely brilliant company. Everything explained and sorted for me from start to finish. Will definitely recommend these guys. Thank you from a very happy customer 😁
idrees ali
idrees ali
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Barry O'Brien
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Company Name & Contact Details
Happy Motor Finance
Clippers House
Clippers Quay
M50 3XP
0161 524 0582
Happy Motor Finance Limited is registered in England and Wales under company number: 14387669. Registered office address: Clippers House, Clippers Quay, Salford, England, M50 3XP

Happy Motor Finance Limited (FRN - 989250) is authorised and regulated by the Financial Conduct Authority. We act as a credit broker not a lender. We work with a number of carefully selected credit providers who may be able to offer you finance for your purchase. (Written Quotation available upon request). Whichever lender we introduce you to, we will typically receive commission from them (either a fixed fee or a fixed percentage of the amount you borrow) this will not affect the rate you are offered or the amount you will pay back. The lenders we work with could pay commission at different rates. All finance is subject to status and income. Terms and conditions apply. Applicants must be 18 years or over. We are only able to offer finance products from these providers.

Happy Motor Finance Limited are registered with the Information Commissioners Office under registration number: ZB408604

VAT Number: 456 0212 21
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