How to buy a car on finance? HP vs. PCP

How to buy a car on finance? HP vs. PCP

Buying a car can be an overwhelming experience. We’ve come up with a list of options for you, for example: HP and PCP.

Available Options:

The first method is cash. Cash is the cheapest way to buy cash, whether a full-payment or a partial one. The reason is that you won’t have to pay interest for a cash transaction. However, remember to save some cash after you’d bought the vehicle.

The second option is a personal loan. You can get a personal loan from a bank or an insurance company. If and only if, your credit history is safe.Personal loans are easy to get. However, some funds might not be available immediately.

Hire Purchase (HP) is another method of securing a car. The total cost is divided into equal portions. You make an initial deposit, and the rest is paid in instalments. HP deals are usually secured by the car dealer. Hence, they are more convenient than personal loans. Nevertheless, HP requires an interest rate.

Another convenient method of payment is Personal Contract Plan (PCP). This method is considered a midway between HP and Personal loan. The customer pays the difference between the sale and the resale price to the dealer. The monthly payments are very low, so is the deposit. However, the total cost might be higher than the Hire Purchase.

Personal leasing method in another financing method. You pay the dealer a fixed price, including maintenance. After a certain pre-decided period, you return the car to the dealer. However, you never actually own the car.


There are multiple ways to buying a car. Remember a few things when purchasing your car. First, compare various deals. Secondly, ensure that you can afford monthly payments. Thirdly, compare the costs, including the loans and total payments. Lastly, cash is the cheapest way of buying a car.

How to buy a car on finance? HP vs. PCP
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