PCP is a increasingly popular method to fund your vehicle. It offers great flexibility combined with fixed low monthly payments. At the start of your agreement your car's optional final payment is calculated based on an agreed mileage. This is commonly referred to as a balloon payment.
With PCP, you do not have to commit to buying the car from the outset. You can use it for an agreed period of time usually between 2 to 5 years and then decide what you would like to do. At the end of the agreement you have several options...
Hire Purchase is a straight forward way of spreading the cost of your vehicle, making budgeting easier by combining fixed monthly repayments and a fixed interest rate. There is no mileage restriction with HP. Deposit options are flexible and it is set at the start of the agreement and the remaining balance with the interest is repaid over an agreed period, typically between 1-5 years
Lease purchase is also known as hire purchase with a balloon payment. It is an ideal way to finance your vehicle if you want lower payments compared to standard hire purchase. In order to reduce monthly instalments a deferred final payment or balloon is offset to the end of the agreement, you do have the option to pay a lump sum to own the car out right.
In principle, the term and deposit options remain the same as hire purchase.
At the end of the agreement you have a number of options: