💳 PCP vs HP vs Cash
What is the cheapest way to pay for this car?
Car showrooms compare finance on the monthly payment, which is the one number that can be made to say almost anything. This compares the three ways of paying on what the three years actually cost you.
Figures reviewed September 2026. Free, no signup, nothing stored on our servers.
What this means
Net cost of ownership is everything paid out, less what the car is worth at the end. It is the only basis on which a PCP with a €13,000 balloon, a hire purchase agreement and a cash purchase can be compared at all — and on that basis the option with the lowest monthly payment is frequently the dearest.
A PCP’s low monthly payment exists because most of the car’s value is deferred to the end, not because the car is cheaper. Interest is charged on the whole amount financed, including the deferred portion, for the full term. If you hand the car back instead of paying the balloon, you have spent the deposit and every monthly payment and own nothing.
Cash is not free either. Money spent on a car is money not earning anything, and this counts that as its finance cost. Irish deposit interest is taxed at 33% DIRT, so use an after-tax figure — which usually makes cash look rather good against a 7% hire purchase rate.
What affects the result
- The APR on each offer, which is on the quote and is often very different between PCP and HP.
- The GMFV, which sets the balloon and therefore both the monthly payment and what you owe at the end.
- What the car is actually worth at the end. If it is worth less than the GMFV, the guarantee protects you; if more, the equity is yours.
- Mileage limits on a PCP. Exceeding them is charged per kilometre at the end and can be substantial.
- Condition standards on a PCP. "Fair wear and tear" is defined in the agreement and is worth reading before you sign.
- Whether the deposit is cash or a trade-in, and whether the trade-in valuation is competitive.
What is the cheapest way to pay for this car?
What to check on the quote itself
The APR, not the monthly payment. The GMFV and the mileage limit it assumes. The documentation and completion fees. Whether the deposit contribution being offered is conditional on taking the finance — very often it is, which is the real reason the cash price and the finance price differ.
The costs that come after
None of the options above include running the car. Insurance, motor tax, servicing, tyres and depreciation add several thousand a year, and the true cost calculator is where to see the whole figure. If the choice is between two cars rather than two finance products, the EV vs petrol comparison costs both properly.
Before you trade in
Find out what the current car is worth independently with the valuation tool. A trade-in offered as part of a finance package is easy to undervalue when the conversation is about the monthly payment.
Important assumptions
Every figure on this page rests on these. Where one does not match your situation, the answer moves — sometimes a great deal.
- PCP is modelled as an agreement where interest is charged on the full amount financed including the deferred GMFV, which is how Irish PCP agreements work.
- Hire purchase is modelled as a straight amortising loan over the term with nothing outstanding at the end.
- The cash option is charged an opportunity cost equal to what the money would have earned at the savings rate you set.
- Documentation fees, arrangement fees and any completion fee on a PCP are not included. Check the quote for these.
- No mileage or condition charges are modelled. These apply to PCP only and are set out in the agreement.
- Insurance, motor tax, servicing and fuel are not included — those are the same whichever way you pay, and the car running costs tool handles them.
Official sources
Where this tool applies a published rule, this is where the rule comes from. Check the source before acting on anything that matters.
- CCPC — car finance explained
The state consumer body's explanation of PCP, hire purchase and personal loans, and the rights attached to each.
- Central Bank of Ireland — Consumer Protection Code
The rules lenders must follow when offering hire purchase and PCP agreements, including the information they must provide.
- Citizens Information — hire purchase and PCP agreements
Your legal position under a hire purchase agreement, including the right to end it early and the half-rule.
Common questions
Is PCP cheaper than a car loan?
The monthly payment almost always is; the total cost usually is not, once you account for the balloon payment or for handing the car back with nothing to show. Run both through the comparison above with the actual APRs from your quote — the answer depends entirely on those two rates and the GMFV.
What is a GMFV?
The Guaranteed Minimum Future Value — what the finance company guarantees the car will be worth at the end of a PCP. It is the balloon payment you make if you want to keep the car. If the car is worth more than the GMFV, the difference is equity you can use as a deposit on the next one; if less, you hand it back and the finance company takes the loss.
Can I get out of a PCP early?
Hire purchase and PCP agreements in Ireland carry a statutory right to end the agreement early by paying up to half the total hire purchase price — the "half rule". Early termination is rarely cheap and the exact position depends on how far through the term you are. The finance company must give you a settlement figure on request.
Do I own the car on a PCP?
Not until the final payment is made. Until then the finance company owns it, which means you cannot sell it without settling the agreement first. That is true of hire purchase as well.
Should I pay cash for a car?
If the finance rate is higher than what your savings earn after DIRT, cash costs you less. The counter-argument is liquidity — money in a car cannot be spent on anything else, and running down an emergency fund to buy a car is usually a bad trade.
What to check next
What is my car actually costing me?
Depreciation, fuel, insurance, tax, servicing and tyres as one annual figure and a cost per kilometre.
Car True Cost CalculatorPopularIs this car worth the money?
An estimated Irish market value from make, model, year and mileage.
Car ValuationNewWhat will this car be worth later?
Projected value year by year, and what the depreciation costs you per year.
Car Depreciation CalculatorNewWould an EV actually save me money?
Both cars costed over the years you will keep them, at your mileage and your electricity price.
EV vs Petrol or DieselNext steps across CheckIreland
Picked for what you just worked out — not a list of everything we make.
- What is the trade-in worth?A trade-in is easy to undervalue when the conversation is about a monthly payment.
- What the car costs after thatNone of the finance options include running it, and running it is the larger number.
- Is the GMFV realistic?The balloon is only a good deal if the car is worth more than it when the time comes.
CheckIreland is independent and is not affiliated with the Irish Government or any public body. This tool is general information built on published rules and typical costs — it is not financial, tax or legal advice, and it does not account for your individual circumstances. Confirm anything that matters with the relevant body or a qualified adviser before acting on it.