PCP vs HP: Which Vauxhall Finance Option Is Right for You?
When buying a new or used Vauxhall, the right finance plan can make all the difference. Whether you’re looking at the new Vauxhall Corsa, Astra, or Mokka, choosing how to fund your car is just as important as choosing the model itself.
In the UK, most car buyers now use finance rather than paying in full — according to the Finance & Leasing Association, over 80% of new cars are bought through finance each year.
At Advance Vauxhall, we offer two main types of car finance, i.e., Personal Contract Purchase (PCP) and Hire Purchase (HP). Both give you flexible ways to spread the cost of your new car, but they work very differently.
In this blog post, we’ll help you understand how each plan works, how they compare, and which one may suit your budget and lifestyle.
What Is PCP Finance and How Does It Work?
A Personal Contract Purchase (PCP) agreement is one of the most popular car finance options in the UK. It allows you to drive a new Vauxhall with lower monthly payments and the choice to return or buy the car at the end.
Here’s how it works:
You pay an initial deposit, which is usually around 10% of the car’s value. Then you make fixed monthly payments for an agreed term (typically 3–4 years). At the end, you have three choices:
- Return the car to the dealer.
- Pay the optional final payment or “balloon payment” and keep the car.
- Part-exchange the car for a new Vauxhall and start another PCP deal.
Because you’re only financing part of the car’s total value (not the full amount), your monthly payments are usually lower than with HP.
Who PCP Finance Suits
- Drivers who like upgrading to a new Vauxhall every few years.
- Those who want affordable monthly payments and flexibility at the end.
- Buyers who keep mileage within agreed limits (usually 6,000–10,000 miles per year).
Points to Consider
What Is HP Finance and How Does It Work?
A Hire Purchase (HP) agreement is a straightforward way to own your Vauxhall outright. You spread the full cost of the car — minus any deposit — across fixed monthly payments.
Here’s how it works:
- Pay an initial deposit (typically 10% or more).
- Pay monthly instalments over 2–5 years.
- Once the final payment is made, you own the car completely.
There’s no large balloon payment at the end, and no mileage restrictions. HP finance gives you full ownership and control, which is why it’s a great option for drivers planning to keep their Vauxhall long-term.
Who HP Finance Suits
- Drivers who want to own their car at the end of the agreement.
- Those who drive higher annual mileage.
- Buyers who prefer simplicity and don’t want final payments.
Points to Consider
- Monthly payments are higher than PCP because you’re financing the car’s full value.
- You can’t sell the car until the financing is fully paid off.
- The agreement may last slightly longer to spread the total cost.
PCP vs HP: Key Differences Explained
Both options have their advantages. PCP offers flexibility and lower monthly costs, while HP gives you ownership and peace of mind. The right choice depends on how you plan to use your car.
Finance Calculator Example: PCP vs HP for a Vauxhall Corsa GS
To help you visualise the difference, here’s a practical comparison between PCP and HP for a Vauxhall Corsa GS, priced at £22,000.
months
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(Figures are for illustration only. Actual finance rates and offers may vary. Based on a representative 8.9% APR.)
What this shows:
- PCP gives you a lower monthly payment, making it easier to manage your budget.
- HP gives you ownership without a large payment at the end.
- If you plan to upgrade to a new car often, PCP may fit better. If you prefer to keep your Vauxhall for several years, HP could be more cost-effective.
Which Vauxhall Finance Option Fits Your Lifestyle?
Choose PCP if:
- You like driving the latest models every few years.
- You want smaller monthly payments and the flexibility to upgrade.
- You cover a moderate mileage each year.
Choose HP if:
- You prefer full ownership at the end of the term.
- You plan to keep the car long-term or pass it on.
- You drive high mileage or travel frequently.
Hidden Costs and Things to Watch Before Signing
Every finance deal comes with small details that matter. Before you sign your agreement, make sure you understand the key terms:
Mileage Charges (PCP only)
If you exceed your annual mileage limit, you may be charged per mile. For example, 2,000 miles over a 10,000-mile limit could add up to £200–£500.
Fair Wear and Tear
When returning your Vauxhall at the end of a PCP, the car must be in good condition. Minor marks are fine, but damage can lead to repair fees.
Early Settlement
Both PCP and HP can be settled early under the Consumer Credit Act. Always ask your dealership for an early repayment quote before making extra payments.
Interest and APR
Compare the Annual Percentage Rate (APR) — the total cost of borrowing. Even a 1% difference can save hundreds over a 4-year term.
Insurance Requirements
Your car must have comprehensive cover throughout the finance period. GAP insurance is optional but can protect you if your car is written off or stolen before it’s paid off.
How to Choose the Best Vauxhall Finance Option
At Advance Vauxhall, we make it easy to compare PCP and HP side by side. Here’s how we help you decide:
1. Personalised Finance Quotes
We’ll show you clear, transparent monthly payment options for both PCP and HP on your chosen model — no jargon, just figures you can compare easily.
2. Flexible Deposits and Terms
Choose your deposit, term length, and mileage allowance to find a plan that works with your budget.
3. Upgrade Support
If you choose PCP, we’ll help you trade in your car at the end of the term, often with enough equity to put towards your next Vauxhall.
4. Ownership Advice
If you prefer HP, we’ll explain how to shorten the term, reduce total interest, and own your car sooner.5. 0% Finance and Special Offers
We often have limited-time Vauxhall finance deals, including 0% APR and deposit contributions — available exclusively through Advance Vauxhall.
Final Thoughts
The main difference between PCP (Personal Contract Purchase) and HP (Hire Purchase) lies in ownership and payments. With PCP, you pay lower monthly instalments and have the option to return, upgrade, or buy your Vauxhall at the end with a final balloon payment. With HP, you pay higher monthly instalments that cover the car’s full value, meaning you own your Vauxhall outright once the final payment is made.
In short, if you want to drive the latest models and keep costs predictable, PCP offers freedom and affordability. If you prefer to own your car outright and avoid mileage limits, HP gives you that peace of mind.
At Advance Vauxhall, we’ll guide you through every step. Our finance specialists can create a side-by-side quote for PCP and HP on your chosen model, so you can make an informed decision about your next Vauxhall.
Frequently Asked Questions
1. Is PCP cheaper than HP?
PCP usually has lower monthly payments because you only pay for the car’s depreciation, not its full value. However, the total cost can be higher if you choose to buy the car at the end.
2. Can I end a PCP or HP agreement early?
Both can be settled early, but you’ll need to contact your finance provider for an early settlement figure. Depending on how far through the term you are, early settlement may save or cost extra interest.3. What happens at the end of a PCP agreement?
You can return the car, pay the final balloon payment to keep it, or trade it in for a new Vauxhall. Most customers choose to upgrade to a newer model every few years.
4. Can I get 0% finance on a Vauxhall?
Vauxhall often offers 0% finance on selected models, including the Corsa and Mokka. Availability depends on promotions and your credit approval.
5. Which finance option is better for electric cars?
PCP tends to suit electric vehicles better, as battery technology changes quickly. It lets you upgrade more often without worrying about resale value.
