When choosing a car finance option, Personal Contract Purchase (PCP) and Hire Purchase (HP) are two popular choices, each catering to different needs and preferences.
Neither typically requires a deposit, making them accessible for various financial situations.
1
What are the main differences between HP and PCP?
1. Ownership
- HP: You are the registered keeper of the car during the agreement, the lender retains legal ownership until the final payment, including a small ‘option to purchase’ fee. Once paid, the car is yours outright.
- PCP: You do not automatically own the car. At the end of the agreement, you can pay a ‘balloon payment’ to purchase the vehicle, return it, or trade it in for a new one.
2. Monthly Payments
- HP: Monthly payments are typically higher as you are paying off the full cost of the vehicle over the term of the agreement.
- PCP: Monthly payments are usually lower because they only cover the car’s depreciation during the term, plus interest, not the entire vehicle value.
3. Flexibility at the End of the Term
- HP: Offers no flexibility—you pay the full price of the vehicle over time and then own it outright.
- PCP: Provides more flexibility with three options: pay the balloon payment to keep the car, return it to the lender or use any remaining equity to trade in for a new vehicle.
4. Upfront Costs
- HP: A deposit is optional in most cases, and agreements can often be arranged without one.
- PCP: Similarly, most PCP agreements do not require a deposit, making them accessible for those who prefer not to pay upfront.
Sun Motors: Buy your next vehicle today
If you’re part of the 3.3 million Brits looking to buy a used vehicle this year, Sun Motors is an ideal place to start
*If you click on a link in this boxout we will earn affiliate revenue
Sun Motors is a seamless, straightforward, transparent platform that ranks by customer searches, not payments. It offers innovative financing and concierge services, ensuring a simple, fair car-buying experience.
Enjoy:
- A choice of fuel type whether it’s petrol, diesel, electric or hybrid
- A range of models from convertible, estate, saloon and many more
- A range of top brands such as Ford, Volkswagen, Toyota and BMW
- Financing options
- Trusted dealers
Summary: PCP vs HP
- HP: Ideal for individuals who want to own the car outright and keep it for the long term. It’s a straightforward option for those who prefer fixed costs and no surprises. Choose HP if you want full ownership of the vehicle and can manage higher monthly payments.
- PCP: Perfect for those who like to change their car regularly or are uncertain about committing to ownership. Lower monthly payments and the flexibility at the end of the agreement make it an attractive choice. Choose PCP if you prefer lower monthly payments and the flexibility to upgrade, return, or purchase the vehicle at the end. Your choice ultimately depends on your financial priorities, lifestyle, and long-term plans for the vehicle. Both options can be tailored to suit your needs, so ensure you understand the terms before committing.
Discover the Easiest Way to Compare Car Financing with Sun Motors HP and PCP Calculator
Sun Motors has introduced a game-changing feature — an HP and PCP calculator which is connected to the widest panel of lenders available on any marketplace in the UK.
While most marketplaces only provide HP quotes, Sun Motors goes a step further. Our platform offers both HP and PCP options, giving you the flexibility to choose the finance plan that best suits your needs.
Whether you prefer the straightforward ownership model of HP or the lower monthly payments and end-of-term options of PCP, Sun Motors has you covered.
HP and PCP Calculator: How It Works
Using the HP and PCP calculator on Sun Motors is as simple as entering a few details:
1. Choose Your Vehicle: Select the car you’re interested in from our extensive listings.
2. Enter Your Preferences: Input details like deposit amount, term length, and mileage (for PCP).
3. Compare Options: Instantly view tailored quotes for both HP and PCP from our lender panel.
4. Apply Directly: Once you find the best option, proceed with your application directly through the platform.
Connected to the Widest Panel of Lenders
What truly sets Sun Motors apart is its unparalleled access to the UK’s largest panel of lenders. This means more options, better rates, and tailored financing solutions for every buyer. By connecting you to a diverse range of lenders, Sun Motors ensures that:
● You get competitive quotes for both HP and PCP.
● You have access to a variety of terms and conditions that suit your budget.
● You can compare offers side by side to make the most informed decision.
Buying a used car? Check out Sun Motors and find your next vehicle today. Whether you’re looking for automatic, manual or electric, use Sun Motors to decide on your next model.
