Compare finance options
See how Personal Contract Purchase and Hire Purchase compare, including things to consider, so you can choose the right option for you.
Product comparison
Both products are available to finance your new or used car. The table below shows the key differences between Personal Contract Purchase (PCP) and Hire Purchase (HP) — including what each product offers and what to consider before you choose.
| Product | Hire Purchase (HP) | Personal Contract Purchase (PCP) |
|---|---|---|
| New and used cars | ✔ | ✔ |
| Minimum balance to finance | Typically £1,000 | Typically £1,500 |
| Length of agreement | New Car: From 12 to 60 months Used Car: From 12 to 60 months (subject to age of vehicle) | New Car: From 24 to 49 months Used Car: From 24 to 49 months (subject to age of vehicle) |
| Deposit required | Zero deposit may be available | Zero deposit may be available |
| Miles per annum allowed | Not applicable | New: 6k to 24k per annum Used: 6k to 24k per annum [max total miles 100k] |
| Fixed monthly payments | ✔ | ✔ |
| Optional final payment (GFV Guaranteed Future Value) | ✘ | ✔ |
| Maximum permitted age of car at the end of agreement | New Car: 5 years Used Car: 15 years | New Car: 4 years Used Car: 9 years |
| Ownership option at end of agreement | ✔ After any applicable option to purchase fee has been paid | ✔ After GFV and any applicable option to purchase fee has been paid |
| End of agreement goods return option | ✘ | ✔ Return conditions apply |
| Mileage and condition restrictions/charges | ✘ | ✔ Refer to agreement |
| Ability to amend annual mileage in life | ✘ | ✘ |
| Voluntary termination | ✔ Return conditions apply | ✔ Return conditions apply |
| Early settlement option | ✔ | ✔ |
| Insured adequately against all risks and for the vehicle's full replacement value | ✔ | ✔ |
| Ability to amend monthly payment due date | ✔ | ✔ |
| Optional maintenance packages available | Service plans available | Service plans available |
Related FAQs
What is an Optional Final Payment (also known as the Guaranteed Future Value (GFV) or Balloon Payment)?
You select a term and an annual mileage and based on this we’ll calculate what we think your car will be worth at the end of this term. This amount is the GFV and is deferred to the end of your agreement. Your monthly payments are worked out on the difference between the GFV and the price of the car. This means you typically have lower monthly payments than with Hire Purchase. At the end of the agreement you have the flexibility of three options.
What are my options at the end of my agreement?
At the end of your Personal Contract Purchase agreement (PCP) you have the flexibility of three options:
· Retain - you can keep the car. Pay the final payment (Guaranteed Future Value or GFV) and the £10 option to purchase fee and you will own the car outright.
· Return – you can hand your car back to us without paying the final payment (Guaranteed Future Value or GFV) If you decide you would like to return your car to us without paying the final payment, please contact us on 0345 128 8908. If you have exceeded your agreed mileage or the car is not in a good condition, then there may additional charges to pay. Excess mileage charges will be explained before you sign the agreement, so you will know what these may be if you go over your estimated mileage.
and finally, your third option is:
· Renew - you can part exchange your car and subject to market value conditions, this should cover the cost of the final payment (Guaranteed Future Value or GFV). Then together with your Honda retailer, you can start looking for your next Honda.
Who is eligible for our finance?
· Anyone who has lived in the UK for at least 3 years
· Over 18 years old
· Holds a valid driving licence
· Has an email address and mobile number
· Holds a UK personal current account for the purposes of making the monthly repayments by direct debit
· Has a regular income to cover repayments
· Will be the registered keeper of the vehicle
Please note that the vehicle is only allowed to be used for personal purposes and not business
The following customers are ineligible for finance with Honda Financial Services:
· Taxi drivers
· Couriers
· Delivery Drivers
· Driving School instructors
· Single Hire Operators
What happens if I exceed my contracted mileage?
Mileage allowances are agreed with you prior to entering your PCP agreement. Where the mileage allowance has been exceeded and you chose to return the car at the end of your PCP agreement, charges are applicable on a per mile [+ VAT] basis. This charge is due upon returning the car. Please note, it is important to be as accurate as you can when setting your annual mileage for your PCP agreement. This will reduce the likelihood of incurring excess mileage charges.
Latest finance offers
Personal Contract Purchase (PCP) and Hire Purchase (HP) are available across a wide range of new Honda cars. You can explore finance options, configure your vehicle and apply for finance online or speak to your nearest Honda retailer for guidance.
Finance a used car
Honda Financial Services also offer finance for used cars bought through a Honda retailer. Our Personal Contract Purchase and Hire Purchase options can help you spread the cost.
Finance jargon explained
Our finance glossary explains the key terms used in car finance — from APR and GFV to balloon payment and voluntary termination — all in plain English.
How to apply for our finance
Find out what you will need to have ready and how the application process works before you apply.