What's the difference between PCP and HP?

Both are ways of financing a car, but they work differently. With HP (Hire Purchase), your deposit and monthly payments are calculated to pay off the full value of the car, so once the final payment is made, it's yours outright with nothing further to pay.

With PCP (Personal Contract Purchase), monthly payments only cover the car's expected depreciation, which makes them lower, but you're left with a large optional final payment if you actually want to own the car - if you don't pay it, you hand the car back instead.

Which one makes more sense depends on what you want: HP is straightforward ownership with no surprises at the end. PCP gives lower monthly payments and more flexibility to change cars more often, but you need to plan for that final decision, and mileage limits apply throughout.