Personal Contract Purchase

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Simply explained

This short video provides a simple explanation of Personal Contract Purchase and how it works.

What is it?

A Personal Contract Purchase is a flexible form of loan where some of the cost is deferred until the end of the agreement in order to provide you with the benefit of lower monthly payments. The deferred amount is known as the Optional Final Payment and is sometimes also referred to as the Guaranteed Future Value (GFV).

How does it work?

  • You will agree an estimated annual mileage and this will be used to determine the Optional Final Payment
  • You agree on the amount of deposit, and this figure combined with the agreement duration and Optional Final Payment will determine the amount of your monthly payment
  • You sign the agreement, pay the deposit and then make the monthly payments
  • The interest rate is fixed which means you’ll know exactly how much you will repay throughout the term of the agreement
  • At the end of the agreement we’ll write to remind you of the three available options
  • You decide which option is best for you. Your dealer may be able to help if you decide to part exchange the vehicle.

At the end, you have three options:

Retain the vehicle

Simply pay the Optional Final Payment, and the agreement is complete.

Return the vehicle

There’s nothing more to pay if the vehicle is in good condition and within the agreed mileage terms.

Renew the vehicle

Choose another vehicle, using any excess part exchange value that is above the Optional Final Payment towards your deposit.


  • A fixed monthly payment, allowing you to budget with confidence
  • Variety of options available at end of the agreement
  • You can match the length of your agreement with the time you want to keep the vehicle

Other things you should know:

  • At the end of the agreement it is possible there may not be any equity (the difference between the final payment and the value of the vehicle)
  • A higher deposit means you will have lower monthly repayments. However it will not change the Optional Final Payment set at the start of the agreement, or the valuation at the end of the agreement
  • If you decide to return the vehicle at the end of the agreement and it has covered more miles than agreed, you will be required to pay a charge for excess mileage. In addition, if you have not kept the vehicle in reasonable condition for its age and mileage you may be charged a refurbishment cost
  • This type of finance agreement is not available to corporate entities, e.g. limited companies, PLCs or limited partnerships

This type of agreement is covered by the Consumer Credit Act 1974, which means:

  • You can pay off lump sum amounts during the agreement
  • You can settle the agreement early by repaying the required amount.

Following an accepted application, Santander Consumer will fulfil your Personal Contract Purchase as a Conditional Sale agreement. What does this mean?

Conditional Sale: The agreement is secured against the vehicle. If you do not keep up your repayments, we may take steps to recover the money that you owe us, which may include repossession of the vehicle. Only when all payments under the agreement have been made do you become the owner of the vehicle.