The vision to own the car of your dream can be realised if you approach the right method of financing. Today, you don’t have to pay the full payment value of the car at a go. You can actually own a car and drive it as you pay in installments. Two of the most affordable methods of car financing include Hire Purchase (HP) and Personal Contract Purchase (PCP). 

Hire Purchase Car Financing

Hire Purchase involves two main payment elements. First, you have to pay an initial deposit amount for the car. Secondly, you are expected to pay monthly installments on top of the deposit. When both payments are settled, the HP contract comes to an end and you gain full ownership of the car. Before the last installment, you only enjoy temporary ownership of the car.


Advantages of HP

  • You have the opportunity to drive a car that you probably wouldn’t have bought outright.

  • You are not expected to estimate the mileage at the beginning of the HP agreement.

  • You get to enjoy temporary ownership of the car as soon as you pay the first installment.


Disadvantages of HP

  • The total payment of HP is usually greater than if you were to pay for the full value of the car in cash.

  • You have the responsibility to keep the car in good condition until you pay the last installment.



Personal Contract Purchase Financing

PCP is similar to HP in a number of ways. Both financing methods involve the payment of deposit and monthly installments. However, the difference is that the installments in PCP are paid in depreciation. This means that you pay lower rates each month depending on the car value.


Advantages of PCP

  • The charges are slightly lower than HP.

  • At the end of the PCP, you can decide to return the car, ask for an exchange, or keep it.

  • You have the opportunity to drive and own an expensive car.


Disadvantages of PCP

  • You are responsible for the car maintenance charges during the contract period.

  • You have to pay the Guaranteed Future Value (GFV) to keep the car.



Overall, the two financing methods are effective in helping you finance and drive the car of your dream. You have the opportunity to decide between the two and choose what suits you. You can decide on any method, provided that you are able to pay the charges promptly.