PCP vs HP vs PCH: Which Is Cheapest?
For a £30.000 car over 36 months at 7,9% APR: PCP costs £506,54 a month, HP £841,45 and a typical PCH lease £330,00. After subtracting the car's £14.500 end value where you keep it, the net costs are PCP £20.245, HP £18.802, PCH £13.780 and cash £15.500. Lowest monthly payment rarely means lowest cost: enter your own quotes above.
PCP, HP and PCH compared
| Feature | PCP | HP | PCH lease |
|---|---|---|---|
| Do you own the car? | Yes, after the optional final payment | Yes, after the last payment | No, it goes back |
| Monthly payments | Lower (balloon deferred) | Highest | Usually lowest |
| End of the agreement | Pay GMFV, hand back or part-exchange | Car is yours | Hand back |
| Mileage limit | Yes, excess charged | No | Yes, excess charged |
| Hand back early at 50% paid | Yes (CCA s.99) | Yes (CCA s.99) | Usually no: early-termination fees apply |
| Who carries depreciation risk | Lender, below the GMFV | You | Lender |
| Total interest | Higher than HP | Lower than PCP | Built into the rental |
When each one wins
PCP (Personal Contract Purchase)
PCP suits drivers who change car every 2–4 years, want low monthly payments and value the GMFV guarantee against a fall in used-car prices.
HP (Hire Purchase)
HP suits buyers who will keep the car for years after the last payment: no mileage limit, less interest overall and no balloon to refinance.
PCH (Personal Contract Hire)
PCH suits drivers who never want to own, prefer a fixed cost and are confident about mileage and keeping the car in good condition.
Cash
Cash avoids interest entirely but ties up savings; compare against what that money would earn, especially against 0% APR manufacturer deals.
Just want the PCP numbers?
The PCP calculator focuses on one deal: monthly payment, equity at the end and when you can hand the car back.
Perguntas frequentes
Is PCP or HP cheaper?
HP is usually cheaper in total because you repay the whole loan over the term and pay interest on a falling balance. PCP defers the GMFV, so you pay interest on it for the whole term in exchange for lower monthly payments and the option to hand the car back.
What is the difference between PCP and PCH?
PCP is a loan with an optional final payment: you can own the car, part-exchange it or hand it back, and you have voluntary-termination rights. PCH is a rental: you pay an initial rental (often 3, 6 or 9 months) and monthly rentals, never own the car and cannot buy it at the end.
Can I buy my car at the end of a PCH lease?
No. Personal contract hire has no purchase option; the car goes back to the leasing company, which may charge for excess mileage and damage beyond fair wear and tear. If you might want to keep the car, choose PCP.
Can I end a PCP or HP agreement early?
Yes. Under section 99 of the Consumer Credit Act 1974 you can voluntarily terminate once you have paid half the total amount payable (deposit, monthly payments, interest, fees and, on PCP, the balloon). Write to the lender, return the car in reasonable condition and owe nothing more. Below the halfway point you can pay up to half and then terminate, or settle early with a rebate of future interest.