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PCP vs. PCH

What’s the difference between PCP and PCH?

PCP vs. PCH

PCP is a purchase plan, customers have the option to buy the car at end of the contract.

PCH is a hire plan that can offer attractive monthly payments but you do not own the car at the end of the agreement.

 

If you’re in the market for a new car, you might be starting to research which finance option is best for you.

You’ll need to get some key pieces of information in place before you know which type of agreement will suit you, such as what monthly payment you can afford, how much deposit you can put in up front, and how likely it is that your circumstances might change.

Personal Contract Purchase (PCP) and Personal Contract Hire (PCH) are two of the most popular types of car finance agreement. They’re not the only plans available but they are often compared with one another when car buyers are making a decision about finance.

The table below will help you to understand the differences between PCP and PCH, and to give you the first step in deciding which type of finance agreement to explore further.

PCP vs PCH comparison table

  Personal Contract Plan (PCP) Personal Contract Hire (PCH)
Will I need a deposit?

Not necessarily

People often put down from 0-40% of the purchase value of the car

No deposit

You may be required to pay a rental fee upfront

How large are the monthly payments*? Usually lower than a Hire Purchase agreement (due to the baloon payment) Lower than products that allow you to purchase the car
Will I need to calculate my mileage in advance?

Yes

Your agreed mileage will help set your monthly payments and the gaurenteed future value

Yes 

Your agreed mileage will influence your monthly payment and you'll need to stick to it to avoid additional costs

Will there be a balloon payment at the end of the agreement?

Yes - if you choose to purchase the vehicle. 

Learn more about PCP end of contract options here.

No
Will I own the car at the end of the agreement?

Yes you can choose to own the vehicle

You also have the option to return or part-exchange the vehicle. 

No
Will I be tied to the full duration of the contract? You may be able to end the agreement early by paying off the difference between the current value o the car and the amount you still owe

Yes 

Changing or stopping the agreement will result in additional charges

Is maintenance included as part of the plan? Many agreements will include an option for maintenance, but this isn't gaurenteed Many agreements will include an option for maintenance, but this isn't gaurenteed

*Details correct as of November 2018. PCP and PCH are not the only options for car finance; there are other products available which may better suit your circumstances.

We have pulled together all the information, videos, and tools you need to make an informed decision about the right finance product for you.

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