Can You Get a PCP Agreement For Used Cars?

Is PCP finance on used cars the best way to fund a second-hand vehicle? Many drivers get Personal Contract Purchase deals for new cars so it’s worth exploring if this type of car finance also works well for used vehicles. If you’re thinking about financing a second-hand car, and looking for a great finance deal on used cars, then let’s dive in and learn more about PCP car finance deals!

PCP Car Finance Deals on Used Cars

Let’s first answer the question, “can you get PCP finance deals on used cars?” Absolutely! Personal Contract Purchase car finance is available for both brand new and second-hand cars. When you finance a car with PCP, the cost is spread over a certain number of monthly instalments. 

This makes having a car more affordable, since you don’t have to spend a lot of cash on it. You do usually have to pay a deposit upfront though, which is at least 10% of the car’s value. Some car finance companies offer zero-deposit car finance deals as well so do check on those if that’s something you prefer. 

With PCP car finance, the monthly repayment amount is typically lower than what you pay for in a Hire Purchase deal. It’s because your payments go toward the predicted depreciation of the car, not its full price like with HP car finance, or  personal loan. 

However, since PCP is designed this way, expect to pay the balloon payment at the end of your agreement if you want to own the car. It’s an optional final payment and you don’t have to push through with it if you don’t want to. 

Instead, you can return the vehicle to the car finance company and simply walk away. The third option is to use the remaining equity of the vehicle as part of your deposit for a new PCP deal. It’s a fast and easy way to upgrade your ride. 

Why Get a Used Car with PCP Finance?

Car finance is an affordable way to enjoy the freedom and convenience of having your own ride. You don’t have to spend a big chunk of your savings, instead, the cost is divided into the deposit, monthly payments, and the balloon payment at the end of your agreement if you decide to own the car. You can lower the cost even more by choosing a used car.  So this option is a way to get a good finance deal on used cars. You might even find you can afford a PCP car finance deal for your first Mercedes if that is your dream!

Many drivers in the UK upgrade their cars every couple of years so there are a lot of second-hand vehicles still in great condition on the market. There are many advantages when it comes to choosing a used car over its brand new counterpart. The first one, of course, is the price. A second-hand car will cost less overall so you can expect your monthly payments to be cheaper.  So you can get cheap PCP car finance. 

Also, since used cars are more affordable, you can get a better car with more features and still be within your budget. Brand new cars are pricey so you might be limited to fewer models that will fit the price range you have in mind. Besides, there are plenty of nearly new vehicles like ex-demonstrator cars that haven’t been really used a lot. It’s just as good as a brand new car and it’s definitely worth considering if you want to save money. 

How to Get the Best PCP Car Finance Deals?

So, now that we know that you can get PCP on second-hand vehicles, the next step is to learn how to find good finance deals on used cars. 

Compare APRs

You would want the best PCP car finance deal you can get, so when you’re looking around, you should be comparing the interest rates of different lenders. However, this is not enough because you still have to take into account the other fees and charges of financing a car. So, the best way to go about it is to look at the annual percentage rate or APR that car finance companies offer. 

Lenders advertise representative APRs, meaning the figure on the ad might not be the exact one that they’ll offer you. The average car finance interest rate you can expect depends on your credit score, among other factors. As a general observation, the higher your credit score, the lower the interest rate. Conversely, when you have a low credit score, you might be offered a higher interest rate by the lender. 

Boost Your Credit Score

If you want to get great finance deals on used cars, focus on the things that you can improve, like your credit score. Before you apply for PCP car finance, check your credit score and determine if it’s excellent already or if it’s not that good. If you see that your score is low, try to boost it first so that you’ll have a better chance of getting credit with lower interest rates. 

Some of the things you can do are paying off your current loans, making sure you make bill payments on time, and updating your address by registering on the electoral roll, amongst others. Check your credit report as well to see if there are any errors in your personal information because that can affect your credit score, too. Watch out for any fraudulent transactions under your account and immediately report them to the credit bureau. 

Pay a Substantial Deposit

Finally, you might be offered a better car finance deal if you can put down a big deposit for the car. A substantial deposit means you’re borrowing less money from the car finance company so you’ll be paying less interest overall as well. You can even try to negotiate for a lower APR if you have an excellent credit score and ample cash for a big deposit. It’s worth a try if it means you get to save money, so do have a shot at it. 


Hopefully, this article was able to answer your question, “can I get PCP car finance on used cars?” PCP car finance makes having your own ride affordable and convenient, plus you have flexible options at the end of your PCP agreement.  If you choose a used car over a brand new one, then you can get cheap PCP car finance deals and make having a car even more budget-friendly! 👍🚗