Hire purchase (HP) and Personal Contract Purchase (PCP) are the two predominant forms of car finance.

A HP is the traditional and simplest form of finance. The cost of the vehicle you are buying is spread over an agreed length of time, between 2 to 5 years and an agreed fixed interest rate is attached to the loan with the loan paid back over equal monthly instalments.

A PCP is essentially a Hire Purchase agreement; however part of the loan is not paid off during the loan term but as a single payment at the end of the loan period. This payment has several names – a residual, balloon or guaranteed future value, but is essentially a lump sum that is owed on the car. None of this residual amount is paid off with your monthly payments and a PCP contract will typically provide lower monthly instalments. PCP contracts are well established in the new car market and gives the customer to hand the car back at the end of the agreement.

Fast n Funded does not offer PCP car finance but it offers Hire Purchase with a balloon at the end for a final payment, with no option to hand back at the end of the agreement