For motor dealers in 2026, understanding car finance isn’t just about product knowledge, it’s about advising customers on the finance options that genuinely work for their individual needs and affordability, while also driving sales and managing forecourt stock effectively. With vehicle prices remaining high, electric vehicle (EV) adoption accelerating, and customer expectations continuing to evolve, dealers play a vital role in helping customers navigate their choices with confidence and clarity.
Being able to match the right customer to the right product builds trust and reduces uncertainty at the point of sale. By clearly explaining the differences between Personal Contract Purchase (PCP) and Hire Purchase (HP), dealers can support customers choose finance solutions that align with their budget, usage, and long-term plans, creating better outcomes for both the customer and the dealership.
This guide breaks down PCP and HP in plain language, explains why each can work for both your customers and your dealership, and highlights recent updates to PCP terms for older vehicles.
Why PCP can be a great fit for your customers
Personal Contract Purchase (PCP) is structured around the vehicle’s predicted future value, keeping monthly payments manageable while offering flexibility at the end of the agreement. Because customers are financing the vehicle’s depreciation rather than its full value, PCP typically offers lower monthly payments than HP.
PCP offers clear benefits to buyers:
- Lower monthly payments* than HP, helping customers manage their budgets
- Flexibility to spread repayments over 36-48 months
- Optional deposits, giving customers greater choice
- End-of-term options, including returning the vehicle, paying the final payment to keep it, or part exchanging
*PCP may result in a higher total cost of credit than HP depending on the agreement structure and end of term option.
These features are particularly appealing for customers considering EVs, higher-value vehicles, or those who value flexibility over long-term ownership.
Why PCP is a great fit for your dealership
From this month, we're extending PCP to 6- and 7-year-old cars, available via MotoPro and Codeweavers direct.
What does this mean for your dealership?
- Sell more stock: Offer PCP on vehicles that previously sat outside standard PCP criteria
- 6-year-old vehicles: 36- and 48-month PCP terms
- 7-year-old vehicles: 36-month PCP term only
Other parameters remain unchanged:
- Minimum annual mileage: Cars 6,000
- Maximum mileage at inception: Cars 70,000
- Guaranteed Future Value (GFV): 90%
This extension gives dealers greater flexibility to convert older stock, support a wider range of customer budgets, and improve overall forecourt efficiency. If you currently submit business using our MotoPro system or via Codeweavers direct, these changes will happen automatically, so there's nothing you need to do to start using this new finance option.
Why HP can work for your customers
Hire Purchase (HP) remains a strong option for customers who want a clear, straightforward route to ownership. As the full vehicle value is financed, monthly payments are typically higher than PCP, but ownership is guaranteed once the final payment is made.
HP is well suited to customers who:
- Want to own the vehicle outright at the end of the agreement
- Are not concerned about mileage limits
- Plan to keep the vehicle long term
- Want predictable monthly repayments with no end-of-term decisions
Key differences between PCP and HP
When advising customers, understanding how these products differ is essential:
- Monthly payments: PCP generally offers lower monthly payments than HP, which may suit customers seeking lower monthly commitments.
- Ownership: HP guarantees ownership at the end of the agreement. PCP gives customers a choice, return, part exchange, or keep the vehicle when the final payment is made.
- Mileage: PCP agreements include mileage limits; HP does not.
- End-of-term options: PCP offers flexibility at the end of the agreement, while HP provides a more straightforward route to ownership.
By positioning these differences clearly, dealers can support customers in understanding of the long-term implications, total cost and responsibilities associated with each product.
Partnering with MotoNovo to drive sales
Strong partnerships matter more than ever. We support dealers with:
- A range of finance options to meet diverse customer needs
- Widened credit access, helping more customers qualify responsibly*
- Digital tools including online proposals, self-service options, e-signature, split signing, and integrated calculators
*Subject to status and affordability.
These resources make finance easier to present, reduce administrative effort, and help dealers convert more sales while maintaining compliance and managing risk.
Driving forward confident finance conversations
PCP and HP remain central to modern car finance. With the latest PCP updates for 6- and 7-year-old vehicles, dealers can:
- Convert older stock more efficiently
- Offer accessible finance to a broader customer base
- Improve sales conversion and forecourt profitability
We work in partnership with dealers to support confident, flexible, and customer-focused finance conversations, helping you stay competitive and profitable in an evolving market.
