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PCP & HP monthly payments — deposit, balloon, APR and total cost compared

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£
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months
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Guaranteed Future Value — the optional final payment on PCP

PCP vs HP Comparison

PCP Monthly
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HP Monthly
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PCP — total paid (if you hand car back)—
PCP — total to own (inc. balloon)—
HP — total to own—
⚠️ Illustrative. PCP includes mileage limits and condition charges. Always compare the total amount payable, not just the monthly figure.

PCP vs HP — The Key Difference

Hire Purchase (HP) spreads the full car price over the term — at the end, you own the car. Personal Contract Purchase (PCP) defers a chunk of the value to an optional final "balloon" payment (the Guaranteed Future Value), making monthly payments lower — but you only own the car if you pay the balloon at the end.

PCP End-of-Term Options

  • Pay the balloon and keep the car (or refinance the balloon)
  • Hand the car back — walk away (subject to mileage and condition)
  • Trade in — any value above the GFV becomes your deposit on the next car

Watch Out For

Mileage limits (excess charges of 5–10p+ per mile), damage charges at return, and the total amount payable. A low monthly payment on PCP can cost more overall than HP once the balloon is included. Since the FCA's 2021 reforms, dealers can no longer earn commission linked to your interest rate — but always compare offers from your bank too.