What is PCP?
PCP stands for Personal Contract Purchase. It is a flexible finance option that helps you spread the cost of your next vehicle with monthly payments over an agreed term. You will pay an initial deposit, followed by fixed monthly payments for the number of months you choose.
When your agreement comes to an end, you will have three options:
- Pay the optional final payment (also know as the balloon payment) and own the vehicle outright
- Hand the vehicle back with nothing more to pay, subject to the agreed terms and condition of the vehicle
- Give the vehicle back and start a new PCP agreement on another vehicle
With PCP your annual mileage is agreed at the start of the agreement. It is important to choose a mileage allowance that reflects your driving habits, as excess mileage charges may apply if you go over the agreed limit.
What is HP?
HP stands for Hire Purchase. It is a straightforward way to finance a vehicle by spreading the cost over fixed monthly payments.
You will pay an initial deposit, followed by monthly payments over an agreed term. Unlike PCP, there is no large final payment at the end of the agreement, as you are paying off the full value of the vehicle throughout the contract.
Once all payments have been made and you reach the end of the agreement, you will pay an option-to-purchase fee and you will own the vehicle.
For more information about car finance, please read our useful guide.
Please contact us to find out more.
Email – sales@freewheel.autos
Telephone – 01257 650654