Use this guide before you visit a dealer or sign a car finance agreement. You need your budget, an idea of your yearly mileage, and quotes from at least two sources. This is general information, not personal financial advice.
Step by step
Know the basic difference
With hire purchase (HP), you pay a deposit and fixed monthly payments over the term, and you own the car after the final payment. With personal contract purchase (PCP), monthly payments are usually lower because a large final payment, often called a balloon or optional final payment, is deferred to the end. At the end of a PCP, you can usually pay the balloon to keep the car, hand it back, or part-exchange it. You do not own the car until all payments are made in either case.
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