What is the difference between hire purchase, car leasing and PCP?
With hire purchase you own the car once all the repayments are made – in effect you take out the car with a right to buy. Should you choose to, you can return the car and you should only have to pay around half the cost. With car leasing you never actually own the car. Instead you make monthly repayments based on the residual value of the vehicle at the end of the contract period. Once this term comes to an end you can simply hand the car back or take out another lease. Personal contract purchase (also known as PCP) works in much the same way as a car leasing deal but at the end of the term you have the option to pay a lump sum to own the vehicle.
