Who pays for servicing and repairs on PCP finance?

When you enter into a PCP (Personal Contract Purchase) agreement, you become the registered keeper of the car, but you won’t be its legal owner until you’ve made the final payment. Since protecting the car’s value is in your best interest, it’s important to maintain it well during the loan period, and this includes looking after the annual servicing and any repairs it might need. We’ll help you work out what you’re responsible for as the borrower, and what’s covered by your finance provider.

What servicing and maintenance is required?

Regardless of whether you own your car outright or have financed it through a PCP agreement, regular servicing is essential to keep the vehicle running smoothly. Every manufacturer will have a recommended service schedule, and sticking to it will often be a condition of your PCP agreement. Failing to follow the service schedule could lead to extra fees or penalties.
This becomes especially important if you plan to return the car at the end of the agreement. Damage beyond what’s considered “fair wear and tear” could result in additional charges. If it’s a new car and your agreement lasts longer than three years, you’ll also be responsible for ensuring that the car has an up to date MOT. If it’s a used car and older than 3 years, you’ll be responsible for booking in a yearly MOT to ensure it’s roadworthy.

What happens if the car needs repairs?

As the car’s registered keeper, you’re responsible for any repairs which are not covered under your warranty. This could involve fixing any issues discovered during regular servicing or repairing things like scrapes or dents (they happen to the best of us!). You have the freedom to choose your garage for both servicing and repairs, as long as they use approved parts.

Your PCP agreement will include a “fair wear and tear” policy, and you should keep in mind that any damage beyond that will come out of your pocket. It’s important to maintain the car well throughout your agreement to avoid significant charges when you return it. If the car is in poor condition at the end of your contract, you may face substantial penalties.

How to manage servicing and repairs on PCP

Some PCP agreements will already include a service or maintenance package, or you might be offered the option to add one. It’s worth checking the details when you first sign up, as adding a maintenance plan to your agreement could save you money in the long run.

By keeping up with regular servicing and maintenance, you’ll protect the car’s value and possibly reduce its depreciation. A well-maintained vehicle might even be worth more than the predicted value (the GMFV) at the end of your agreement, which means you could have a decent amount of positive equity to put toward a new car.

End-of-contract considerations

At the end of your contract, the car will undergo an inspection to determine its condition and to check the mileage. The results of this inspection can impact whether you face any additional charges. If you’ve missed any servicing or there’s excessive damage to the car, you’ll run the risk of potentially hefty fees.

If you feel that the car might need some repairs before you return it, consider taking it to your preferred garage for a final tune-up before its inspection. This can be a more affordable option than handing the car back and facing repair costs and penalties later.