If you are looking for car finance and wondering which type is best for you, here we will compare PCP and HP, so you can see the difference and work out which of them, if any, suits you best.

Finance isn’t always right for everyone and it is important that you speak to an expert to help you find out whether it is the right move for you. You will need to make sure you can commit to the monthly repayments and that you understand everything in full.

Hire Purchase

Hire Purchase is referred to as HP and it is a finance agreement whereby the goal is for you to own the car at the end of the agreement. You will pay a deposit on the vehicle and then the balance will be spread over an agreed amount of months for you to pay back. It will all be detailed out in the agreement for you to see and understand before you drive away. At the end of the term, there may be an option to purchase fee, often the equivalent of a monthly payment, and the car will be yours.

Personal contract purchase

Personal contract purchase is sometimes referred to as PCP, is similar to HP. There is a deposit to pay, usually, and the payments will be split over an agreed number of months or years. You will have a policy schedule and you will have everything before you drive away. At the end of the agreement, you will usually have a few different options. The first one being to hand the car back to the finance company, the second being to use it towards your next finance agreement, and the third, to pay a balloon payment in order to own the car. The balloon payment will have been detailed out in the agreement but it is often quite a lot of money if you want to own the car.

If you are interested in finding out more about car finance, come and speak to the team at Hilton Car Supermarket.

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