Most cars in Ireland are bought on finance, and the two products you'll be offered at almost every dealership are PCP (Personal Contract Plan) and HP (Hire Purchase). They can look similar on a quote sheet, deposit, monthly payment, fixed term, but they work very differently, and picking the wrong one can cost you thousands.
Here's the plain-English version we give customers at our Dublin showroom every week.
Hire purchase: the straightforward one
Hire purchase is the simpler and older of the two. You pay a deposit (typically 10–30%), then fixed monthly payments over 36–60 months. When the final payment clears, the car is yours automatically. Done.
- No balloon payment at the end
- No mileage limits or condition inspections
- You build equity from day one
- The finance company legally owns the car until the last payment
Because you're paying off the full price of the car (minus deposit), the monthly payments are higher than PCP for the same car, but the total cost of credit is usually lower, and there are no end-of-term surprises.
Who HP suits
Buyers who plan to keep the car, drive whatever mileage they like, and want the loan finished with nothing left owing. For used cars, which is most of what we sell, HP is usually the better fit.
PCP: lower monthly payments, bigger decision at the end
PCP splits the cost into three parts:
- Deposit: usually 10–30% of the car's value, in cash or trade-in
- Monthly payments: typically over 36 months, covering only the car's depreciation during the term, not its full price
- The balloon payment (GMFV): the Guaranteed Minimum Future Value, a large final sum agreed at the start
Because the monthlies only cover depreciation, they're noticeably lower than HP, often €100–€300 less per month on the same car. The catch is what happens at the end of the term, when you have three options:
- Pay the GMFV and own the car outright
- Hand the car back and walk away (subject to mileage and condition checks)
- Trade in: if the car is worth more than the GMFV, the difference becomes your deposit on the next PCP
Side-by-side comparison
| Hire Purchase | PCP | |
|---|---|---|
| Monthly payments | Higher | Lower |
| Final payment | None | Balloon (GMFV) |
| Own the car at the end | Yes, automatically | Only if you pay the GMFV |
| Mileage limits | None | Yes, with penalties |
| Total cost of credit | Usually lower | Usually higher |
| Flexibility at end of term | N/A, car is yours | Return, buy or trade in |
| Best for | Keeping the car | Changing car every 3 years |
A worked example
Take a €15,000 used car with a €3,000 deposit over 36 months:
- HP: roughly €360–€390 a month, and after the last payment the car is yours. Nothing more to pay.
- PCP: roughly €220–€260 a month, but with a GMFV of around €6,000 waiting at the end. Want to keep the car? Find €6,000 or refinance it. Don't want it? Hand it back and start again. The deposit isn't returned.
Rates and GMFVs vary by lender, car age and term, so treat these as illustrative, but the shape of the trade-off is always the same: PCP rents you the depreciation; HP buys you the car.
This video gives a good independent overview of how the main options compare:
What about a personal loan?
The third route is a bank or credit union loan. You own the car from day one, there are no mileage limits, and credit union rates are often competitive, but approval can be slower and the car isn't security for the loan, so rates depend on your credit profile. It's worth pricing alongside dealer finance before you decide.
Your rights under Irish law
Both HP and PCP are regulated under the Consumer Credit Act 1995. Two protections worth knowing:
- The half rule lets you return the car and end the agreement once you've paid half the total amount payable, a legal right built into every HP and PCP contract.
- Faulty car? Under both products the finance company is the legal owner, which makes them responsible alongside the dealer for putting faults right.
The CCPC's car finance hub is the best independent reference if you want the full legal detail.
How we handle finance at Hadi Motors
We arrange finance on the majority of cars we sell, with decisions usually back the same day. Tell us your budget and deposit, and we'll show you what the monthly payment looks like on any car in our current stock, with the total cost of credit in writing, not just the monthly figure. Start on our finance page or get in touch and we'll talk you through it with no obligation.
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The bottom line
If you want to own your car and drive it without restrictions, hire purchase is usually the right call, especially on used cars. If you want the lowest monthly payment and plan to change car every three years, PCP can work, as long as you go in with your eyes open about the balloon payment and mileage caps. Either way, compare the total repayable, not the monthly, and you won't go far wrong.
