When buying a car, there are two options for financing that often crop up when browsing. These are HP and PCP. What do they mean? What are the differences?
If financing a car is financially more appropriate for you, then it’s worth knowing what HP and PCP car financing is and which one to choose.
What is a PCP?
PCP is short for Personal Contract Purchase. It’s a secured loan which means you won’t become the owner until you pay the final balloon payment at the end of the agreement.
With PCP you get three choices; pay the balloon payment to owe the car, give the car back or enter into a new PCP agreement.
What is a HP?
HP stands for Hire Purchase. This involves making an initial deposit and the remaining cost of the vehicle is divided into equal monthly payments. Once the last payment is made, you’ll then own the car outright.
Choosing between PCP vs HP
Which one is the best for you? It’s important to consider which one is more affordable for the budget that’s available. For some, a secured loan through a PCP gives more options, whereas a HP allows you to own the car outright without the balloon payment at the end of the agreement.
When shopping for used car finance in Wales, think about what’s available. Some deals may only offer one finance option, whereas others will offer both. Weigh up the positives and negatives that come with both and use this infographic to help make an informed decision for your next car purchase.
Shopping for used car finance wales
