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Upgrade Your Car: PCP Vs. HP Finance

Upgrade Your Car: PCP Vs. HP Finance

Are you driving the same car for more than a decade?

Are your friends buying new cars?

Does your car seem out of place in public parking?

Well, my friend, it is time to buy a new car.

Even if your car is in good functioning, you might still need to buy a car. Now and then, a new car is launched. The shiny body and the new and enhanced features can be very attractive.

Purchasing a new car has its own thrill. People love the new car smell. It will be a big decision. But buying a new car if you already have one is an even more significant decision.

Think thoroughly before updating your car.

Following are the reasons to consider before updating your old car:

When the cost of maintaining your car exceeds the present value of the car itself, it’s time to get rid of it and buy a new one. You know that the value of a car deteriorates as soon as it is out of the shop.

Financing a new car may be beyond your budget, so taking a car loan can help. Taking out guaranteed car finance for bad credit can save you from worrying over your car.

Benefits to Upgrade Your Car

There are plenty of benefits to upgrading your car.

Your car might look the same, but if it is older than 10 years, its engine’s performance can give up at any moment. Upgrading your old one with the latest one with new features is the right decision.

If you are still wondering if you should get a new car or not, take your old car to a competent team of mechanics, they will tell you the actual value of your old car. And if you are planning to buy a new one, they will even help you sell the old one.

The most common approach to finance your new car is PCP finance or HP finance. Today we are comparing PCP to HP so you can pick a better one for yourself.

Personal Contract Purchase (PCP)

PCP divides the price of the car into small percentages and allows you to pay every month installment to pay for the car. When the contract expires, a buyer usually has a choice to trade the car in for a new one.  It involves the formulation of a new financial agreement.

Another option is for the buyers who wish to own their existing car. They can make a balloon payment, which is the final lump sum.

A buyer can also choose to hand the automobile back and can go back during the end of the financial term. In this scenario, the buyer does not keep the old one but gets a new one.

Hire Purchase (HP)

HP is a rather simple type of car finance. The price of the car is divided into an early deposit and regular monthly installments that also include interest. By the end of the term, the buyer becomes the sole owner of the car.

A buyer can use HP at their convenience. You can pick a five-year plan or finish the entire term within one year. The sooner you pay up, the smaller the interest rate.




Not a legal owner of the car at the end the legal owner of the car at the end
Fines to pay for the vehicle damage or overdrive No fines on vehicle damage or driving beyond the driving limit.
Trade the older one with the newer one No trading option, you get car ownership at the end of the term.
Owning a car is optional, you can even trade it for a newer one Ownership of the car is not optional

Which One to Pick?

Now that you understand how PCP and HP work, it is up to you to decide which one suits you better. However, we brought some pointers to select:

If you want the sole ownership, go for HP, but if you want to keep your options open or trade the older own for a newer one, you can opt for PCP.

Go for HP if you’re concerned about the car price depreciation.

When Should You Not Upgrade Your Car?

It is not necessary that you must upgrade your car every ten years. It has to be extremely vital that you keep track of your finances. If you do not have any savings, you prefer not to go for an upgrade.

Upgrading your car just for social status might dig a massive hole in your pocket.

Don’t upgrade your car if:

Buying your first car or second is a huge decision that should not be made in haste. Think and pick the right car for yourself. Happy shopping!


It’s time to sell your automobile and acquire a new one when the expense of maintaining it surpasses the car’s current value. PCP or HP financing is the most typical way to finance a new car.

PCP stands for personal contract purchase, and at the end of the period, the buyer becomes the sole owner of the vehicle. On the other hand, HP is a type of financing that divides the cost of an automobile into an initial deposit and a series of monthly payments that include interest.

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