Is PCP cheaper than HP each month?

Usually yes. PCP defers a large chunk of the car's value to an optional final 'balloon' payment, so the amount you finance each month is smaller. The trade-off is that you don't own the car at the end unless you pay (or refinance) that balloon.

Which works out cheaper overall, PCP or HP?

Total cost depends on interest rate, term and what you do at the end. HP usually has slightly lower total interest because you're paying the loan down faster. PCP can be cheaper overall if you part-exchange before the final payment and roll any equity into your next car.

Can I switch from PCP to HP (or vice versa) later?

You can settle a PCP early and refinance on HP, or vice versa. You'll need a fresh credit check and a new agreement, our soft search shows the rates you'd qualify for without affecting your score.

Does this calculator affect my credit score?

No. The calculator is illustrative only and runs entirely in your browser. When you're ready to see real rates, our eligibility check uses a soft search that's invisible to other lenders.

How accurate is the PCP final payment estimate?

We estimate the Guaranteed Minimum Future Value (GMFV) based on term and annual mileage, the two biggest drivers of depreciation. Real lender quotes vary by make, model, condition and current market demand.

Finance Calculator

PCP vs HP Calculator

Compare Personal Contract Purchase (PCP) and Hire Purchase (HP) side by side to see which finance option is right for you.

Written and reviewed by Phil Kehoe, Director, Motoring Today · methodology in our editorial standards.

Last reviewed: July 2026

No impact on your credit score

This calculator won't affect your credit score. It's 100% free to use.

Soft search No commitment 60 seconds

Your comparison

Based on a £30,000 car with a £3,000 deposit over 48 months at 9.9% APR.

PCP Finance

Personal Contract Purchase

Your estimated monthly payment

£461/month

9.9% APR Representative

Optional final

£12,600

Pay at the end
or return the car

Cash price£30,000

Deposit£3,000 (10%)

Amount of credit£27,000

Term48 months

Annual mileage10,000 miles

Monthly payments48 × £461.13

Optional final payment£12,600.00

Option to purchase fee£1.00

Total amount payable£37,735.24

Includes interest of £7,735.24

View PCP example

HP Finance

Hire Purchase

Your estimated monthly payment

£678/month

9.9% APR Representative

No final payment

You own the car outright

Cash price£30,000

Deposit£3,000 (10%)

Amount of credit£27,000

Term48 months

Annual mileage10,000 miles

Monthly payments48 × £678.03

Final payment£0.00

Total amount payable£35,545.44

Includes interest of £5,545.44

View HP example

Representative example9.9% APR representative

Cash price: £20,000
Deposit (advance payment): £2,000
Total amount of credit: £18,000
Duration of agreement: 48 months
Rate of interest (fixed): 9.5% p.a.
Monthly repayment: £307.42 × 48
Optional final payment (balloon): £8,400
Option-to-purchase fee: £1.00
Total charge for credit: £5,157.16
Total amount payable: £25,157.16

Motoring Today is a credit broker, not a lender. Motoring Today is a trading style of Motor Genius Group Ltd (FRN 960504), an appointed representative of The Compliance Guys Ltd, which is authorised and regulated by the Financial Conduct Authority (FRN 941360). Finance is subject to status and approval; rates depend on your circumstances and the lender. Available to permanent UK residents aged 18+. Example figures only — not a quote.

Which suits you?

A quick gut-check on the deal that tends to fit each kind of driver.

I want the lowest monthly cost

Happy to hand the car back or refinance at the end

PCP

I want to own it outright

No mileage worries, no balloon, the car is mine at the end

I change cars often

New wheels every few years, always under warranty

PCP

Key differences at a glance

Ownership

Who owns the car at the end?

You have options: return it, part-exchange or pay the final payment to own it

You own the car outright once all payments are made

Monthly payments

How much are the payments?

Usually lower monthly payments

Usually higher monthly payments

Final payment

Is there a balloon payment?

Yes, optional final payment at the end

No, no final payment

Flexibility

What are your options?

More flexible, return, part-exchange or pay final payment

Less flexible, you own the car

Best for

Who is it best suited to?

Lower monthly payments, changing cars frequently

Longer-term ownership, keeping the car

Not sure which is right for you?

Answer a few quick questions and we'll recommend the best finance option for your needs.

Find my best option Cars with free insurance

No impact on credit score

Soft search only, check your options with confidence.

Representative monthly payments

See representative payments based on your budget.

Quick and easy

Takes less than 60 seconds to get your results.

See what you could be approved for in 60 seconds

Check your eligibility

No impact on credit score Free, with no obligation See representative monthly payments

Frequently asked questions

4.6/5 on Google

our approved dealers · 2,422 reviews

Approved dealer network

Independently verified

Secure & encrypted

Your data is always protected

On the FCA register

Appointed Representative (FRN 960504)