HP car finance
Fixed monthly payments, and the car is yours once the last one is paid.
What is hire purchase?
Hire purchase (HP) is one of the simplest ways to finance a car. After any deposit, the rest of the car’s price is spread over fixed monthly payments. Once you’ve made the last payment, the car is yours.
How HP works
- You pay a deposit. This can include the value of a car you part exchange.
- You make fixed monthly payments, usually over one to five years.
- You own the car once the final payment and any option to purchase fee have been paid.
Because there’s no large payment at the end, monthly payments on HP are usually higher than on a PCP for the same car. In return, there are no mileage limits and you end up owning the car.
Things to think about
- The car is secured on the agreement. It belongs to the lender until you’ve paid in full, so you can’t sell it without settling the finance first.
- Fees. Some lenders charge a documentation fee or an option to purchase fee. These will be shown in the lender’s quote.
- Handing the car back. On a regulated agreement you have a legal right to end it early once you’ve paid half of the total amount payable. This is called voluntary termination.
- Settling early. You can also pay off the agreement early. The lender will give you a settlement figure, which usually includes less interest than you’d pay over the full term.
Is HP right for you?
HP suits people who want to own their car, plan to keep it for a long time, or drive more miles than a PCP would allow.
Not sure which is better for you? Call us and we’ll explain the difference using the car and budget you have in mind.
Representative example
Hire purchase
8.9% APRrepresentative
- Cash price
- £15,000.00
- Deposit
- £1,500.00
- Amount of credit
- £13,500.00
- Duration
- 48 months
- 48 monthly payments of
- £333.11
- Total charge for credit
- £2,489.34
- Total amount payable
- £17,489.34
- Fixed interest rate
- 4.61% p.a.
Representative APR 8.9%. Finance is subject to status and available to UK residents aged 18 and over. We are a credit broker, not a lender.
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Other finance options
Personal
All personal car financeWhen do I own the car on hire purchase?
Once you've made the final monthly payment and paid any option to purchase fee. Until then the car belongs to the lender, so you can't sell it without settling the finance first.
Can I part exchange my current car?
Yes. Your current car's value can go towards the deposit on your next one. If there's still finance on it, the settlement figure is taken into account, and we'll explain how that affects your new agreement.
What's the difference between PCP and HP?
With hire purchase (HP) you pay off the full cost of the car in fixed monthly payments and own it at the end. With a personal contract purchase (PCP) part of the cost is deferred to an optional final payment, so monthly payments are usually lower. At the end of a PCP you can pay the final payment and keep the car, hand it back (subject to mileage and condition), or part exchange it.
Can I pay off my finance early?
Yes. You have a legal right to settle a regulated finance agreement early. Ask the lender for a settlement figure. You'll usually pay less interest than you would over the full term.
Can I get finance on a used car?
Yes. Lenders on our panel finance both new and used cars. The age and mileage limits vary by lender, so tell us about the car you have in mind.
Ready to talk about your next car?
Call us now, or leave your number and we’ll call you back.