Hire Purchace Vs. Pcp

[Adam1991]

Hi all,

I recently purchaced a 1.0l ecoboost but at the time of going through paper work i just went a bit blank.

The car has not yet been delivered and i have not signed my copy of contract yet but, on the contract it says Hire purchace, i was not asked is i wanted a PCP contract or anything but whats the actual difference?

Ive seen that on PCP you have the option of keeping the car at the end, trading it in for another or jsut giving it back but hire purchace not too sure on? even though ive been told i can do all of the above?

[iNath]

Hire purchase the monthly payments are more and it's paid in full by the end of the term and the car is yours to keep.

[Paramanic]

I always go for hire purchase because the car is yours. With PCP you can get cheaper monthly payments but its like the car is on lease to you

[higgsy]

On previous cars I have always gone HP as like the fact you have something to show for it once its paid off (car belongs to the finance company during the term of the agreement) There is also the personal loan option, which means you take out an standard unsecured personal loan to get the car and then the car is yours from the start and not secured on the car. I was lucky to be able to buy my focus outright this time so don't currently have any finance.

[MattDRX]

Beware with Ford "HP" they are generally just a personal loan and will say "Fixed loan agreement" on the front page, which in short means there is NO option to voluntarily surrender if you get into any financial problems a year or so down the line ( the 50% rule is also crap when you read section 99 of Consumer credit act you can do it anytime ) but you can sell the car off anytime you like.

Have a thorough read of the terms first.

[Adam1991]

im just confused. On the "Hire purchace agreement" ive been given to sign, it says i have a GMFV final payment at the end of the agreement which is turn can be paid if the car is given back, traded in as a deposit or refinanced... but thats PCP isnt it?

And i was also given the customer proposal when deciding what i can afford and that too says " Hire purchace example" bla bla bla.

What what is it? HP or PCP? it does not say PCP anywhere but looks as though thats how they have financed it

[MattDRX]

Hire Purchase is finance to OWN at the end of the term, generally 5 years given the cost of the car and you own from the start.

PCP is a lease deal and you do not OWN until all paid off with a huge payment at the end, the final balance cannot be used as a deposit either, it's like them giving you 7K for free and not paying for the car that way, it's pay the balance and own or hand the car back and start all over again with a new deposit.

[btmaldon]

I thought it was called Ford Options. I had my last two cars on the Options. The first one I Part x'd after two years and the last one I paid off the GMFV at the end of three years. I didn't want another loan after that.

HP shouldn't include a GMFV. Check how much you are borrowing. Then multiply the monthly payments by the number of months in the agreement and see if it is more than the loan value. If it is you have an HP agreement, if it is well short of the loan agreement then it is an Options PCP agreement and you will have to pay the GMFV if you want to keep it.

[Philf1]

As said a HP is just a loan where you pay the amount borrowed plus interest and the final payment sometimes includes an "option to buy" payment usually £10 or £20. A PCP or Ford options will have a Substantial balloon payment at the end usually several thousand pounds.

Sent from my iPhone using Ford OC mobile app