Understanding PCP and HP Car Finance

Buying your next vehicle can be made more affordable with a finance plan that suits your budget. Personal Contract Purchase (PCP) and Hire Purchase (HP) are two popular ways to spread the cost of your vehicle into manageable monthly payments.

What is Personal Contract Purchase (PCP)

PCP can offer lower monthly payments by deferring part of the vehicle's cost until the end of the agreement.

  • Lower monthly payments compared with some other finance options.
  • Choose an initial deposit to suit your budget.
  • Fixed monthly payments for the agreed term.
  • An agreed annual mileage is set at the start of the agreement.
  • At the end, you can usually choose to return the vehicle, pay the optional final payment and keep it, or use its value towards another vehicle.
  • Provides flexibility at the end of the agreement.
What is Hire Purchase (HP)

HP allows you to spread the full cost of the vehicle, plus interest and applicable fees, across the agreement.

  • Simple and straightforward way to finance a car.
  • Choose an initial deposit to suit your budget.
  • Fixed monthly payments for the agreed term.
  • No mileage restrictions.
  • Once all payments have been made and the agreement is settled, you own the vehicle.
  • A straightforward option if you intend to keep your car long term.
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