If you can pay cash without emptying your savings, cash costs least because you pay no interest. Between the two main finance types, hire purchase usually costs less in total interest than PCP on the same car, while PCP has the lower monthly payment. The lowest monthly payment and the lowest overall cost are rarely the same thing.

The figures on your own quote depend on the car, the term, your deposit and the rate you are offered, so we have not used example numbers here. This is how to compare the three fairly.

How does paying cash compare?

You pay the price of the car and nothing else. There is no interest, no agreement and no mileage limit, and the car is yours from day one. The cost of cash is what that money could have done elsewhere. If buying the car would wipe out your emergency savings, a sensible finance agreement can be the safer choice even though it costs more.

How does hire purchase compare?

With HP you pay a deposit and then repay the whole balance, plus interest, in fixed monthly payments. The amount you owe falls every month, so interest is charged on a shrinking balance. You own the car at the end and there is no mileage limit.

How does PCP compare?

With PCP a large part of the price is deferred into an optional final payment. Monthly payments are lower because you repay less of the car during the term. Interest is still charged on the deferred amount for the whole agreement, which is why total interest is normally higher than on HP at the same rate and term. If you pay the final payment to keep the car, PCP is usually the most expensive of the three routes.

So which costs least?

Lowest total cost: cash.
Lowest total cost on finance if you want to keep the car: usually HP.
Lowest monthly payment: usually PCP.
Most protection if the car loses value faster than expected: PCP, because you can hand the car back at the end.

How do I compare two quotes?

Put the same car, deposit and term into each quote.
Compare the total amount payable, which lenders must show you.
On PCP, include the optional final payment if you plan to keep the car.
Check the interest rate, any fees and the mileage terms.

MoneyHelper has an independent overview of the ways to pay for a car. Our own guide to choosing the right finance option covers which type suits which driver.

Common questions

Does paying cash get a lower price?

Not necessarily. The price of a used car is set by the market for that car, and many dealers price the same whether you pay cash or use finance. It never hurts to ask.

Can I end a PCP or HP agreement early?

Yes. You can ask for a settlement figure and pay it off at any time, and you have a legal right to voluntary termination once you have paid half of the total amount payable. See paying car finance off early.

Does the dealer earn money if I take finance?

Usually, yes. We receive a commission from the lender for arranging finance, and we disclose it. Our sales team is not paid commission on finance, and we will tell you how much commission we receive if you ask. More in how we handle finance commission.

Get a quote to compare in Barnsley

anycolourcar.com is in Barnsley, South Yorkshire. Pick a car from our stock, look at finance with us and ask for HP and PCP figures on the same car so you can compare them with cash. Call sales on 01226 574410. Finance is subject to status and affordability checks. We are a credit broker, not a lender.

This guide is general information, not financial advice. Updated October 2026.

PCP vs HP vs Cash: Which Costs Least Overall?