HIRE PURCHASE (HP)
Spread the cost of your entire purchase over a fixed term – you choose your deposit and the length of the agreement and you own the vehicle at the end of it.
PERSONAL CONTRACT PURCHASE (PCP)
A Guaranteed Future Value is agreed at the start of your contract, this is based on your annual mileage and also the length of the agreement. At the end of the contract you have 3 options.
- Hand the car back (provided it is in good condition and within the agreed mileage),
- Part exchange the vehicle against your new one and use any positive equity as a deposit towards it.
- Pay or refinance the balance of the Guaranteed future value and keep the car
Benefits of this type of agreement is that the monthly payments are lower and protection from unexpected depreciation over the length of your contract.