PCP vs HP car finance


Are you navigating your way through car finance for the first time? With so many terms and conditions to consider, car finance can be tricky to manage. However, there are plenty of different financial options out there, so rest assured there’ll be a perfect plan to suit you and your future car’s needs.

Wheel and Alloy of the All-New Ford Mustang 2024

What is PCP?

PCP stands for ‘Personal Contact Purchase.’

Technically this finance agreement is a monthly payment scheme that takes a large amount of your purchase payment at the end of the loan agreement. If you can keep up with the monthly payments, a PCP may be a suitable option for now, but if you have plans to fully own your car, another payment plan may be better suited for you.

​Advantages of PCP finance

  • Small monthly costs.
  • An inexpensive deposit.
  • You can trade in your car on PCP finance for the newest model.

Disadvantages of PCP finance

  • Typically, a payment scheme is only available on newer car models.
  • When your finance term ends, you’ll have to make a larger final payment if you want to keep your car in the long term.
  • Set agreed mileage with the finance plan and larger costs if the car potentially gets damaged.

What is HP?

HP stands for ‘Hire Purchase.’

A straightforward car finance method that allows you to pay less on the deposit for a new car through monthly payments and interest at any time that is convenient for you. 

Compared to PCP finance, this payment agreement requires no large final fee and HP finance can be agreed over any time that suits you (from 12 months minimum). After payment plans have proceeded, you have complete freedom to decide whether to keep or sell your car.


Advantages of HP finance

  • No set mileage limits or potential damage fees.
  • This finance plan is available for both new and used cars.
  • No large final fee: once your HP deal is complete, you become the legal owner of your car.

Disadvantages of HP finance

  • Higher interest rates over time.
  • Higher monthly payments than PCP.
  • Only suitable if you plan to keep the same car and not trade in for a newer model.

What is the difference between car finance and leasing?

Car finance is a monthly payment plan on a car you intend to own, whereas car leasing is more so ‘renting’ a car for a specific amount of time.

Whilst leasing is a cheaper alternative, it is not frequently offered for used car models and is more commonly available with only newer car models. However, through car finance, you can pay monthly and own a car in full at the end of it. 

​Decide the best finance options for you and your new car by reading carefully through the terms and conditions of your finance agreements or enquiring for financial advice at Foray Motor Group. This way you can ensure you are getting a feasible and realistic payment plan to suit you and your budget.

​Find out more about finance options with Foray

We at Foray understand the pressures that come from deciding between car finance options and we are happy to help guide you through set plans with our versatile range of cars across our various dealerships. 

We can assist in making the process of getting your future car as stress-free as possible so you can get excited about getting on the road again with complete peace of mind.

Whether you are interested in a brand-new car or a used car, we are the best provider of vehicle options at a price that’s right for you.

Enquire today for car finance advice or book a test drive to explore our options available, so you can simultaneously find your next future car and suitable finance plan.

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