Personal contract plan

This is a variation on hire purchase and is based on the difference between its sale price and its price for resale back to the dealer. The figures are based on the predicted annual mileage over the period of the agreement. The terms of the contract plan cover a short term period of between 12 and 36 months but result in low monthly repayments.
The usual agreement means that at the end of the plan you:

  • return the car to the dealer and pay nothing
  • trade the car in with the dealer and start all over again, or
  • pay the resale price of the car and own it outright

Personal contract plans offer:

  • low monthly repayments
  • options at end of the repayment term
  • the total sum paid may be more than with hire purchase
  • Mileage and condition of car affects the costs