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OODLE Journal
Get under the bonnet of the Oodle Journal; read about the dream journeys we’ve made possible and the technologies shaping our industry.
What is the difference between HP and PCP?

Hire purchase (HP) and Personal Contract Purchase (PCP) are the two predominant forms of car finance. A HP is the traditional and simplest form of finance. The cost of the vehicle you are buying is spread over an agreed length of time, between 2 to 5 years and an agreed fixed interest rate is attached to the loan with the loan paid back over equal monthly instalments. A PCP is essentially a HP agreement, however part of the loan is not paid off during the loan term but as a single payment at the end of the loan period. This payment has several names – a residual, balloon or guaranteed future value, but is essentially a lump sum that is owed on the car. None of this residual amount is paid off with your monthly payments and a PCP contract will typically provide lower monthly instalments. PCP contracts are well established in the new car market. Oodle Finance does not offer PCP car finance.

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