Are you in the market for a new car and considering a PCP (Personal Contract Purchase) agreement? If you are, it’s wise to familiarize yourself with the PCP agreement cooling off period, also known as the cancellation period.

What is a PCP agreement?

A PCP agreement is a type of car finance that offers lower monthly payments than a traditional car loan. This is because you’re not paying for the full value of the car but rather the depreciation value over the period of the agreement. At the end of the agreement, you have the option to keep the car or return it.

What is the cooling-off period for a PCP agreement?

The PCP agreement cooling-off period is the amount of time you have to cancel the agreement without incurring any financial penalty. In the UK, this period is 14 days and begins from the day you sign the agreement or receive a copy of the agreement.

During this period, you have the right to cancel the agreement for any reason, without having to give a reason. You can notify the finance company in writing, by email or over the phone.

What happens after cancellation?

If you decide to cancel the agreement during the cooling-off period, the finance company must refund you any deposit or payment you’ve made to them within 14 days.

It’s important to note that if you’ve already taken delivery of the car and have driven it, the finance company may charge you for any damage or mileage incurred during this time. It varies from finance company to finance company, but they may also charge you for any costs they’ve incurred related to delivering the car to you.

Why is it important to know about the cooling-off period?

Knowing about the PCP agreement cooling-off period is important because it gives you the opportunity to change your mind without any financial repercussions. It’s a good idea to take the time to carefully consider your decision before signing the agreement, but it’s also reassuring to know that you’re not locked into the agreement immediately.

In summary, PCP agreements can be a great way to finance a car. However, it’s important to understand the cooling-off period and your rights as a consumer. Taking the time to read the contract thoroughly before signing is also crucial in ensuring you understand your obligations and rights under the agreement.