What's the difference between PCP and HP car finance in Ireland?
The short answer
HP is the simpler product: deposit, fixed monthly payments, and the car is yours once the last instalment clears. PCP keeps monthly costs lower by parking a big chunk of the value in a final balloon payment, so you decide at the end whether to buy, return, or roll into a new deal. PCP usually carries annual mileage limits and condition charges; HP does not. Read the APR and total cost of credit on both before signing.
Related questions
Do I own the car during a PCP or HP agreement?
No. With both PCP and HP the finance company owns the car until the agreement is fully paid. Under HP ownership transfers after the final instalment; under PCP only once you pay the final balloon payment (the Guaranteed Minimum Future Value).
Which is cheaper monthly, PCP or HP?
PCP usually has lower monthly payments because a large balloon payment is deferred to the end. HP spreads the full price evenly, so monthly payments are higher but there is no lump sum at the finish and no mileage limits.
Can I exit a PCP early?
Yes. Under Irish consumer credit rules you can hand back the car once you have paid half the total amount (the 'half rule'), or settle early by paying the outstanding balance. Check your agreement for exact figures.
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