PCP v PCH v HP – How should I Finance My Vehicle?

When the time comes to replace your car, you might get confused with the options open to you. There are a lot of acronyms to deal with! Depending on where you look, you might only be offered one option, often not everyone offers every finance product. We thought we would shed some light on the funding options available, and where to look for them to get the right deal for you.

If you head along to your friendly (or sometimes unfriendly) local car dealer and express an interest in buying a new car, they are likely to offer you a Hire Purchase (HP), or Personal Contract Purchase (PCP). PCP can be offered under different names depending on the manufacturer, but is often the same format. In this format, the dealer will provide you with a new car, you choose a deposit, make monthly payments, and then at the end of the term, you face a balloon payment or “Guaranteed Future Value” as some put it – you pay this if you want to keep the vehicle. If you don’t want to keep it, the dealership will value it, and give you a trade in price against a new vehicle. PCP is a great option if you want the option to purchase the vehicle at the end of the agreement, but statistics tell us that most people prefer to change their vehicles rather than own them long term. Using a dealership is great to go and view, and test drive if needed. However, you need to repeat this process several times if you are looking at different brands of vehicle, and it can take a long time to get your pricing. You also need to go back and pick up your new car.

There is always the Hire Purchase option too – where you choose a deposit, and make fixed monthly payments towards the vehicle, and when the term is complete, you stop making the payments and you own the car outright – the monthly fee for this option is usually much higher, as you’re (eventually) paying the entire cost of the vehicle. You then need to sell, or part exchange the vehicle when you want to change it.

But, you have other options too – even if you’re currently on a HP or PCP agreement, you aren’t tied to that for the rest of your natural life.

This is using Personal Contract Hire (PCH), or personal lease as it’s commonly known. This is pretty much what it says on the tin – you’re hiring the vehicle for a set period. At the end of that time, we arrange for the car to be collected from you, and we can arrange a brand new one to replace it. As an independent vehicle solutions company, we open the whole of the market, offering any make and model of car of commercial vehicle, all in one place. The whole process is conducted without you needing to leave the house, we even deliver your new car to your door. So, if you’ve always wanted to drive a Porsche, that’s achievable, if you can afford the monthly payments! If you need a 4×4, ditto, we can arrange a vehicle for you. Then, just as you start to think that the car is looking a bit old, you’ll be able to choose another brand-new car again, no restrictions on the make/model other than the depth of your own pockets!

You also have the option of a maintenance package. With this you can cover the cost of scheduled service, maintenance and tyre costs vis monthly payments, so the only additional cost you are likely pay is to fill up your tank and insure it.

Even If you’ve fallen in love with the vehicle on PCH, and you’ve given it a name, and don’t want to part with it at the end of the term, there are still options to buy it, this is uncommon, but we are happy to help with this if you wish!

People often have different circumstances or buying habits, and one option may suit you more than another. We can offer all of these products on any car; however, we specialise in leasing due to the ease, convenience, cost saving, and rapidly gaining popularity.

If you’re not sure which option is best for you – we’ll happily guide you through the pros and cons of each – just give us a call or email ?