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Dealers Portal UK Editorial
Dealers Portal UK Editorial
PCP (Personal Contract Purchase) offers 30% to 45% lower monthly payments because you only finance the predicted depreciation, but requires a large optional balloon payment (GMFV) at the end if you want to keep the car. HP (Hire Purchase) has higher monthly instalments because it pays off the entire vehicle value, but carries zero mileage limits, zero balloon payment, and automatic 100% vehicle ownership upon the final instalment.
Over 80% of used and new cars purchased through UK motor dealerships involve vehicle finance. Deciding between Hire Purchase (HP) and Personal Contract Purchase (PCP) depends on your long-term ownership horizon and monthly budget constraints.
| Contract Component | Personal Contract Purchase (PCP) | Hire Purchase (HP) |
|---|---|---|
| Vehicle Cash Price | £30,000 | £30,000 |
| Customer Deposit (10%) | £3,000 | £3,000 |
| Monthly Instalment (48m) | £375 / month | £668 / month |
| Optional Final Balloon (GMFV) | £12,500 | £0 (None) |
| Annual Mileage Cap | 8,000 – 12,000 miles/year | Unlimited |
| Total Amount Payable | £33,500 (if balloon paid) | £35,064 |
| End of Agreement Outcome | Keep, return, or trade-in equity | You own 100% of vehicle |
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Published and fact-checked in accordance with 2026 DVLA, DVSA MOT guidelines, and UK automotive marketplace standards.
Aug 20, 2026
