Hire Purchase (HP) Car Finance Explained

What is Hire Purchase (HP)?

Hire Purchase is the most straight forward method of financing your car. Just decide how much you want to borrow (you don’t always need pay a deposit) and repay with fixed monthly payments over any period - normally up to 60 months. At the end of the contract the car is yours.

With hire purchase (HP), you will only own the car once the final payment is made, so although you can't sell the car without getting the finance provider’s permission, you may be able to part-exchange it if you're in positive equity. If you decide you want to pay off the agreement early, this is also a possibility. You can clear the balance of your Hire Purchase agreement, and any interest that would have been payable on the outstanding balance is waived.

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What are the benefits of Hire Purchase (HP)?

Hire purchase is another way saying ‘loaned until it’s paid for’. You agree a price for the car and a period over which to pay it off. The biggest benefit with hire purchase (HP) is that once you've made your last payment, legal ownership transfers into your name and the car is yours to keep, sell or part-ex.

There are no mileage limits, so if you’re a high-mileage driver this can work out cheaper than a PCP deal.

Fixed repayments

At the beginning of the agreement, both the amount you pay every month and the repayment period is fixed and will not change, which makes it great for simple budgeting.

What happens if interest rates go up?

Even if interest rates go up, the interest rate on your finance repayments will not be affected.

Flexible payments terms

Choose any period from 12 months to 60 months to suit your budget. You work out what you want to pay each month and we’ll work out how many months to repay it over to get you into your ideal car.