Hire Purchase (HP)
You usually pay a deposit followed by fixed monthly repayments. The lender owns the vehicle until the final payment and any purchase fee are paid.
- Predictable repayments
- No large optional final payment
- Ownership only at the end
UK car finance guide
Understand the full cost before you apply
Compare common ways to fund a car, the commitments each option creates, and the information a regulated provider should give you before you decide.
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Personal Contract Purchase (PCP)
Part of the vehicle value is deferred to an optional final payment. At the end you can usually return the car, pay to keep it, or use any equity towards another vehicle.
- Often lower monthly payments
- Mileage and condition limits may apply
- Large optional final payment to own
Conditional Sale (CS)
You repay the vehicle price and interest over an agreed term. Ownership normally transfers automatically after the final contractual payment.
- Straightforward route to ownership
- Fixed term and payments
- Early settlement terms apply
Compare more than the monthly figure
A low headline payment can be accompanied by a larger deposit, longer term, fees or a substantial final payment. A compliant illustration should let you understand and compare the whole commitment.
- The cash price, deposit and total amount of credit
- The APR, interest rate and total amount payable
- Every monthly payment, the term and any final payment
- Mileage, condition, early-settlement and termination terms
- All mandatory fees and whether commission may be paid
- Whether repayments remain affordable if your circumstances change