HP Finance

Hire Purchase

Hire Purchase is a type of car finance loan that lets you spread the cost of buying a car. An HP loan is secured against the car, so you'll be effectively hiring the car while you're paying back the loan but, once you've made the last payment and paid the 'Option to Purchase' fee, it'll be yours to drive away. You can keep it, sell it, give it away, or do whatever else you like with it! This means you'll typically have higher monthly payments than you would with other car finance options like PCP, but it's unlikely that you'll have any restrictions on how many miles you can drive, and you'll own the car at the end of your HP agreement. You might have to pay a deposit - although 0% deposit options are available - followed by fixed monthly payments for an agreed time period. How much you'll pay each month will depend on: The size of your deposit The length of your hire purchase agreement the interest rate the car you choose and a few other factors.

If you've ever spread the cost of a large purchase before then you'll have no problem understanding HP (Hire Purchase). HP is an agreement that lets you pick an agreed time period at an agreed rate (typically higher than a PCP/Personal Contract Purchase) in which you effectively hire the car (the loan is secured against the car rather than you) until the end of the agreement when, for a small fee, the car is yours to keep.

The four main factors that lenders consider when calculating your monthly payments will depend on:

  • The size of your deposit (zero deposit options are available)
  • The length of your hire purchase agreement
  • The interest rate
  • The car you choose

Hire purchase is a great option for car finance, particularly if you are keen to keep the vehicle at the end of the agreement. We also work with PCP and bad credit car finance.