Finance

HIRE PURCASE OR PERSONAL CONTRACT PURCASE

We offer u the choice of a Hire Purchase or Personal Contract Purchase finance agreement. Both agreements can be created for car finance deals with no deposit, which is best for you depends on your individual circumstances, we’ll explain the main differences below to shed clarity on the matter:

HIRE PURCASE (HP)

Hire Purchase agreements are a type of credit where once you have paid the total loan amount, you own the vehicle. During the loan term, the financer owns the vehicle. Once you repay them in full, ownaship passes to you. Typercally, Hire Purchase agrements have higher monthly payments because you are repaying the total car amount. With a Personal Contract Purchase, you repay only part of that amount.

PERSONAL CONTRACT PURCHASE (PCP)

Personal Contract Purchase agreements are a type of credit where you pay off instalments to cover part of the cost of a car. Once you have paid off the amount as set out in the agreement, you hand the car back to the owner, who is the financer. Alternatively, if you want to keep the car, you can refinance the remaining cost of it. This is called the ballon payment. It is based on the guaranted future value (GFV) of the car.