PCP vs HP vs Car Leasing

Find the best one for you


When looking for a new car, sorting out the finances can be a daunting task. There are various routes to go down, and it’s not always easy to decide which one is best for you. Luckily, Chill is here to help with a guide to the three most popular options: PCP finance, HP finance and car leasing.


Standing for ‘Personal Contract Purchase’, PCP finance offers you the option of monthly payments, with the opportunity to buy the vehicle at the end of the term. It’s currently one of the most popular routes to go down, but what are the pros and cons for this particular way of financing your car purchase?


  • Low deposit options, making it fairly budget friendly
  • Gives you the option to buy
  • Good flexibility
  • Option to purchase a new car


  • Slightly higher payments than the other two options
  • Large balloon payment at the end of the term (which you don’t have to pay; you could also hand back the car)
  • Mileage limits in place
  • Payments spread over a longer period of time


The ‘Hire Purchase’ option used to be all the rage, but it’s slowed down in favour of PCP in recent years, since drivers are leaning towards looking towards new cars more often. However, this is a great option if you’re interested in buying a used car. But how does it compare to the other options available?


  • Gives you the option to buy
  • Pays off the car quickly
  • No mileage limits


  • Higher monthly payments
  • You’re committed to the car from the start
  • Only available for used cars


The final option is car leasing, also known as ‘Personal Contract Hire’, is a very simple way of getting your hands on a car. All it consists of is an initial rental payment, and then monthly instalments until the contract ends. It’s a great option for more flexibility, and tighter budgets, but how does it hold up in comparison to the rest of the options?


  • Cost effective if you want a new car often
  • Short contract gives you flexibility
  • Ability to choose your contract length


  • No option to buy
  • Mileage limit
  • Expensive in the long run


Once you’ve chosen your method of financing your new car, you’ll need to get it insured. Get a quick quote with Chill to make this the easiest part of the process.