How car finance works
Car finance also comes in different shapes and sizes.
Hire Purchase (HP) works a bit like a loan, except you need upfront deposit and the loan is secured against the car. You pay a monthly sum over 12 to 60 months, and at the end, the car is all yours.
Contract Hire (CH) is a bit like leasing. You never own the car, just pay a fixed monthly sum to hire it for a while. At the end of the agreement, you hand the car back and walk away.
Personal Contract Purchase (PCP) is a cross between the two. You finance part of the value of the car over a fixed term, and when that term finishes, you either hand the car back and walk away or pay the rest of what the car is worth and keep it.