What is positive equity at the end of a PCP?

Positive equity means the car is worth more than the finance amount required to settle or the guaranteed future value used in the deal. It can sometimes be used toward another car, subject to the transaction terms.

In relation to “What is positive equity at the end of a PCP?”, before changing, selling or returning a financed car, establish who owns it and request the current figures from the finance provider.

For “What is positive equity at the end of a PCP?”, read the agreement for the cash price, deposit, total amount payable, optional final payment, mileage allowance and return conditions. The monthly payment alone does not show the whole cost.

For “What is positive equity at the end of a PCP?”, before the final month, ask for the settlement position, return process and inspection standard so you have time to deal with damage, mileage or missing items.

For “What is positive equity at the end of a PCP?”, equity is the difference between the car’s real trade or sale value and the finance settlement figure. Do not confuse an advertised retail price with what a dealer will actually allow in part-exchange.

For “What is positive equity at the end of a PCP?”, this answer is written for a Northern Ireland user, but some vehicle-registration, consumer-credit and insurance functions operate on a UK-wide basis. The attached sources — MoneyHelper - Personal Contract Purchase (PCP), MoneyHelper - Buying a car with Hire Purchase, and nidirect - Contact Consumerline — are therefore deliberately mixed where the responsible authority is UK-wide. That is more accurate than forcing every point into an NI-only source.

Practical next step for “What is positive equity at the end of a PCP?”: open the finance agreement and find the figures or clause relevant to this question. If you are changing or ending the agreement, request the current position directly from the finance provider before promising the car to anyone else.