Entering a car finance contract is an important decision, so you need to know what options are available, and that you fully understand how each option works.
Olivia Wigglesworth
Published: 10 May 2023
Updated: 10 May 2023
Read time: 3 minutes
The following guide should help you decide the right finance for you and your car.
The three most popular car finance contracts available are Personal Contract Purchase (PCP), Hire Purchase (HP) and Personal Contract Hire (PCH).
How it Works
Hire Purchase (HP)
A Hire Purchase (HP) contract usually lasts 2-5 years, needs a deposit, and tends to have higher monthly payments. The car will be owned by you at the end of the contract, meaning it is the most straightforward option available.
Personal Contract Hire (PCH)
A Personal Contract Hire (PCH) is a lease contract and usually lasts 3-4 years, needs an initial rental, and tends to have lower monthly payments. You have to hand the car back to the dealer at the end of your contract. PCH is often described as the most ‘stress-free’ car finance option available.
Personal Contract Purchase (PCP)
A Personal Contract Purchase (PCP) usually lasts 3-4 years, needs a deposit, and tends to have lower monthly payments than other forms of finance.
It is the most flexible car finance with options available at the end of your contract to either:
We hope that this car finance guide was useful. If you still have questions, we’re on hand to help.
We currently have car finance offers available on a wide range of cars – take a look today.
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