Deposit
What you pay at the start, including any part-exchange equity.
How does PCP car finance work?
Personal Contract Purchase (PCP) usually has a lower monthly illustration than HP because an optional final payment is held back until the end of the agreement. Annual mileage is part of PCP. Exact end-of-agreement options come from the finance provider, not from this page.
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How PCP works
You pay a deposit, then monthly payments over a term, with an optional final payment shown on the illustration.
Annual mileage affects a PCP illustration. Changing mileage on the calculator or deal builder updates the estimate. Provider-specific names for that final payment are not invented here.
How Oakwood can help
Check eligibility, browse cars, then compare PCP with HP on a vehicle. The same calculation rules are used in the calculator and deal builder.
If PCP is not available for a configuration, we explain that instead of showing a monthly figure.
Eligibility then application
Eligibility is a soft search. It does not affect your credit score and it is not a PCP application.
Optional final payment, mileage and end-of-agreement choices are confirmed with the finance provider during a full application.
The moving parts of PCP
Monthly payments
Usually lower than HP on the same vehicle because an optional final payment is held back.
Contract term
How many months you pay. You choose the term. We do not extend it automatically.
Annual mileage
Shown only for PCP. It is part of the illustration and can change the optional final payment shown.
Optional final payment
Held until the end of the agreement on Oakwood illustrations. The provider’s official wording is used when it is supplied.
HP and PCP compared
Neither product is universally better. Use this as a guide, then compare both on a vehicle.
Monthly payment
- HP
- The amount financed is spread across the term.
- PCP
- Often lower because an optional final payment is held back until the end.
Final payment
- HP
- There is no optional balloon payment on HP.
- PCP
- An optional final payment is usually due at the end of the agreement.
Mileage
- HP
- HP does not use a PCP-style annual mileage choice.
- PCP
- Annual mileage is part of a PCP agreement and can change the illustration.
Ownership
- HP
- You own the vehicle once all payments are made.
- PCP
- What you can do at the end is confirmed with the finance provider during application.
Total payable
- HP
- Shown with the monthly figure so you can see the overall cost of the illustration.
- PCP
- Includes monthly payments, deposit and any optional final payment shown on the illustration.
Frequently asked questions
What happens at the end of a PCP agreement?
There is usually an optional final payment. What you can do next — such as paying that amount, returning the vehicle, or another option the lender offers — is confirmed during application. This page does not invent those lender options.
Why does mileage matter on PCP?
Annual mileage is part of a PCP agreement. Oakwood only shows mileage choices when PCP is selected, and the illustration updates when you change them.
Is PCP better than HP?
Not for everyone. PCP often has a lower monthly illustration and an optional final payment. HP has no balloon and you own the car once all payments are made. Compare both.
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