Who Pays for Servicing and Repairs on PCP Car Finance?

Personal Contract Purchase – PCP, for short – is one of the most popular types of car finance.
Not only can it help you spread the cost of a car (usually over two to four years), but it also gives you options: you can choose to buy the car, use any positive equity as a deposit in a new deal, or simply hand it back and walk away!
But what are your responsibilities during the agreement before you make that big decision?
As the car’s registered keeper (but not its legal owner), it’s your job to take care of your new pride and joy and make sure it gets all the TLC it deserves. And that includes making sure it’s serviced regularly and repaired if needed.
Don’t make time for that trip to the mechanic and you could end up facing extra charges at the end of your deal or even ending up in negative equity as your car could be worth less than you thought!
Here’s everything you need to know about servicing and repairs on a car with PCP finance:

Does my car need to be serviced if it’s on PCP?

No matter whether you own a car outright or have bought it with a type of finance like PCP, services are an essential part of car maintenance. 
There are a lot of reasons why services are important – and not just because the manufacturer says so! They can help keep your car in good condition, ensure it’s safe to be driven on the road, and help it last for as long as possible.
If you’ve bought the car on PCP, Hire Purchase (HP), or Personal Contract Hire (PCH), making sure you book it in for services on the manufacturer’s recommended schedule is often a condition of your finance agreement - that’s why you should always read the small print.
With PCP, you won’t be the car’s owner during the loan term, but you will be its registered keeper. Making sure that you protect its value as much as possible for the lender is one of your many responsibilities.
Keeping to the service schedule is especially important if you want to hand the car back at the end of your term. Failing to keep the car well maintained and bringing it back with any damage beyond fair wear and tear could leave you facing extra charges.

What if I don’t want to return the car at the end of the term?

When you reach the end of your PCP deal, you have options. You can choose to hand the car back to the lender, use any positive equity as a deposit in a new deal, or pay the one-off balloon payment to become the car’s legal owner.
While you might face extra charges for handing back a car that hasn’t been looked after properly and needs repairs, booking it in for regular services can make a difference even if you’re not planning on handing over the keys.
It’s all about value. Having your car serviced on the manufacturer’s recommended schedule and ensuring it’s kept in the best possible condition could help to slow down the rate of depreciation, so it holds its value for longer.
If everything goes to plan, you could end up with a car that’s worth more than the balloon payment. You could use that positive equity as a nice profit if you decide to sell the car or use it as a deposit for your next set of wheels.

Do I have to get my car serviced by the dealer?

When it comes to deciding where to get your car serviced, the choice is yours – no matter who says otherwise!
In October 2003, a law was passed to ensure you’re free to get your car serviced at the garage of your choice, even if your car is owned on PCP or HP finance. The only caveat is that you must follow the manufacturer’s schedule and make sure the mechanic uses approved parts. It’s also a good idea to keep a record of any work carried out (written evidence is always helpful!)
That doesn’t mean you should discount dealers altogether. While they can be more expensive than independent garages and can only use original equipment (OE) parts, they’re also often more familiar with your model and its garage will have been vetted and monitored by the manufacturer (and we know that peace of mind can often be worth splashing out).

Who’s responsible for repairs under a PCP agreement?

While you won’t be the car’s legal owner under a PCP agreement until you reach the end of the term and choose to pay the one-off balloon payment, you will be its registered keeper.
Being a registered keeper comes with a long list of responsibilities including:

  • MOT and servicing
  • Fuel
  • Vehicle tax
  • Insurance
  • Penalty charges, parking tickets, and speeding fines

You’ll also be responsible for any repairs that aren’t covered by the manufacturer’s warranty. This could mean covering the cost of a new set of tyres or fresh windscreen wipers at your annual service or paying to have a bump fixed after an unexpected fender bender (It happens to the best of us!)
Keep in mind that if you hand the car back at the end of your PCP agreement without making these repairs (anything that goes beyond fair wear and tear), you could face extra charges.

FAQs about servicing and repairs

Is a car worth more with a dealer service history?

The more you know, the better. That’s the maxim that most used car buyers live by, and it’s the reason why having a complete service history can help your car maintain its value.
Prospective buyers will usually want to know that all your services have been carried out on time and according to the manufacturer’s recommended schedule.
Whether the services were completed by  a dealer won’t usually matter unless your car is brand new or a luxury or high-performance model. Once your car is over three years’ old, where it was serviced is unlikely to make much difference to its value. However, if you have a prestige or specialist car, it might be worth checking it in to the dealer no matter how old it is so you can benefit from their expertise. 

What's the benefit of a dealer service history?

Having a dealer service history can come with added perks – and it could be especially worthwhile if you plan on owning a car on finance and want to get the best possible resale value.
There’s no guarantee that a dealer service is any better quality than the service you’d get at your local garage (which also wouldn’t hit your wallet quite so hard), but buyers can look more favourably on a car that’s always been looked after by the ‘experts’.
You might also benefit if your car needs a repair after its warranty has expired. Dealers can look more favourably on customers who have been loyal to them – and they can’t blame the issue on another mechanic! In some cases, they might be more tempted to make a goodwill gesture and fix your car for free or a reduced price.

 What are variable servicing intervals?

If you like to go with the flow rather than stick to a strict schedule, variable serving intervals could be right up your street.
Instead of checking your car in for a service every six months or after a set number of miles, the gap between services will depend on how you drive your car and what type of journeys it does.
A car that does a lot of short journeys – think that 10-minute daily school run or quick trip to the shops – will have a cooler engine that doesn’t get a lot of chances to run at full temperature and so typically needs more regular services than a model owned by a long-distance driver.
The big disadvantage of variable servicing intervals vs. a fixed schedule is that it can catch you unawares. It might be worth looking out for a car fitted with a Condition Based Servicing (CBS) monitor that’ll let you know when a service is due.

Does my car need servicing after an MOT?

Having an MOT is essential if you want to drive your car on public roads. It’s that stamp of approval from a mechanic that says your pride and joy is in legally good enough condition to hit the road. But it doesn’t go beyond safety critical checks, and it won’t fix or prevent any other issues (like stopping your engine from blowing up!)
That’s why you need to add a service too. It’s only by carrying out a service that you can get essential things checked and changed. This includes your engine oil, spark plugs, and air filters.

What are intermediate (or interim), main (or full) and major services?

There are three levels of service available: intermediate, main, and major.
An intermediate or interim service is the car version of a quick check up with your GP. Every six or twelve months, you can book your car into the mechanic so they can look over the major components, change the oil, and refresh the filters.
A main or full service is the next level up and it’s typically an annual event. The checks carried out will be a bit more intense and include a helpful top up of fluids like your brake fluid and coolant.
Ready to take things up a notch? A major service is the equivalent of bringing out the big guns. You’ll usually only need to take your car in for a major every 24,000 miles or two years. As well as all the checks that happen with interim and full services, your mechanic will also change the spark plugs and refresh all the filters.