HP or PCP? Perhaps we’d better expand on that

There are lots of decisions to be made when buying a car. How you would like to buy it, for instance. Here’s a quick look at the differences between the HP and PCP options. Also known as hire purchase and personal contract purchase.

HP

Hire purchase

This is a simple and popular option. It involves you hiring a vehicle from a finance company for an agreed time period. Then, after you’ve made the final payment, the vehicle’s yours. You own it outright.

In short: Higher payments. You can own the car after a final payment.

Find out more about HP
PCP

Personal contract purchase

Similar to HP, PCP differs in the following ways. You pay only the depreciation of the value of the vehicle. Not its full value. So the monthly payments will be lower. But, at the end of the agreement, if you would like to own the vehicle, you’ll have to pay a lump sum.


In short: Lower payments. You can change cars more often without the hassle. A lump sum is needed to secure ownership.

Find out more about PCP
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Comparing the best deals from these top lenders including:

  • Barclays
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