PCP or Hire Purchase? Stop me stressing!

medi212

We have a contract with a car firm that says 'hire purchase'(big letters at top) but the terms seem far more like a PCP. We didn't pay a particularly big deposit, monthly payments aren't enormous and there is a large payment to be made at the end if we want to own it. None of these things seem seem to reflect definitions of hire purchase I've read. It's not a particularly extravagant car- we haven't bought a top of the range merc or anything.

This also follows on from other agreements with the same company. There can't be any outstanding balances from these previous cars can there? Our credit files are clear.

I've never been particularly involved in it all as I don't drive but kicking myself now as I wish I had!

Our outgoings are manageable and we (hopefully!!) have sufficient cover with life/crit illness if something went wrong. We have money in savings to cover the balloon (but had earmarked for other things- inclined to keep it there just in case now) and we aim to save between 400-1000 a month which we have been for some time.

I am a born worrier. What can I do to make sure we don't have any nasty surprises? The media and some discussions at work have got me wound up.
Feeling a little foolish!!Can anyone reassure me? Second baby due and I could do without stressing.

Lucky_Duck_2

What kind of surprises were you expecting?

Pay the monthly instalments then at the end of the term either make the final "balloon" payment, trade it in or hand it back

medi212

Not sure. After reading all paperwork/advice online I thought that would be the case but just like to prepare for eventualities.

forgotmyname

Buy a car with cash?

wgl2014

With a balloon payment at the end it sounds like PCP.

What exactly are you worried about? If you are going to hand the car back make sure it's serviced to the recommended standards and kept in good condition. Keep to the agreed mileage and there shouldn't be any issues.

neilmcl

A PCP agreement IS just another form of HP. Most, if not all PCP agreements will be headed as a Hire Purchase agreement. The only difference between the two is that the ownership of a car on PCP is deferred via the payment of the balloon payment.

macman

For a born worrier, I'm surprised that you'd buy a car on finance without appearing to know what you've contracted to. It's clearly a PCP.