Q&A Special: PCP Finance - PCP and PHP - what's the difference?

Q: What's the difference between a personal contract purchase and a hire purchase finance agreement?

A: A Hire Purchase (HP) scheme divides the amount borrowed into a series of equal monthly payments. Personal Contract Purchase (PCP) schemes leave an extra portion of the loan until the final payment falls due. This means the regular monthly payments should be significantly cheaper if you opt for PCP rather than HP.