HP or PCP — which suits you?

Hire purchase is the straightforward one. You put down a deposit, pay the rest of the car off in fixed monthly payments, and when the last payment clears, the car is yours. No big payment waiting at the end, no annual mileage limit to think about.

The trade-off is that you’re paying off the whole car, so the monthly payment is usually higher than PCP on the same car over the same term.

PCP splits the car’s value in two. Your monthly payments cover the part of the value the car is expected to lose while you have it; the rest is parked as an optional final payment (sometimes called a balloon) at the end.

That’s why PCP monthlies are lower. At the end you choose: pay the final payment and keep the car, hand it back, or use any difference between the car’s value and the final payment towards your next one. PCP agreements set an annual mileage, and going well over it can cost you at hand-back.

If you want to own the car outright and keep it for years, HP usually fits: it costs more each month but ends with no decisions and no final payment.

If you like changing car every few years, or you want the lowest monthly on a given car, PCP usually fits — as long as the mileage allowance matches how you actually drive.

Neither is “better”. The honest answer depends on the car, the deposit, the term and you — which is why we’d rather show you both on the real car than argue in general.

Every car on our website quotes live lender figures on its own page — where a car is eligible for both, you can flick between HP and PCP, change the deposit and term, and watch the genuine figures update before you apply. No guesswork, no “typical examples”.