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What is a Hire Purchase Agreement?

Tim Carpenter, Dedicated car finance expert
Written by Tim Carpenter
Edited on

Hire purchase – or just HP as it is often known – is probably the most common way of buying goods on finance. That is just as true when it comes to car finance and at CarFinance 247, we can offer an almost immediate decision on any hire purchase finance applications.

With hire purchase agreements, you are approved for a set loan amount and are then free to choose a vehicle. We can finance a wide range of vehicles, including cars, vans, motorbikes, motorhomes and taxis and, in most cases, no deposit is required. The balance is funded by paying fixed monthly repayments, over a pre-agreed period of time (typically 36 or 48 months). The loan is secured against the vehicle until the balance has been repaid. When this is the case, ownership of the vehicle is transferred over to you from the loan provider, subject to payment of a small option to purchase fee (usually £10).

You must be over the age of 18 to apply for finance. While having a full UK driving licence is of benefit, we can also help those with provisional licences, subject to your application meeting additional criteria. Our lenders can help those with EU and international licences too.

When considering an application for a hire purchase agreement, finance providers will also look at your credit profile and your income. As a basic, you will need to provide proof of address, proof of income and proof of licence.

At CarFinance 247, all credit and personal circumstances are considered. If you have bad credit – having defaulted on previous credit agreements, been ordered to repay a debt as a result of a county court judgment, because you have entered an Individual Voluntary Arrangement (IVA), or you have previously been declared bankrupt – we may still be able to arrange hire purchase. In fact, we work with a number of lenders that specialise in providing finance to those with less than perfect credit histories.

You may be self-employed, retired or an agency worker, and have previously found it difficult to secure finance or even been refused elsewhere. We’d be hopeful that we could help where others couldn’t!

If you already have existing car finance and require an additional loan for another vehicle, again this is something that we can offer, subject to approval. Similarly, if you want to trade in your existing car (that has finance on it) and get a new one (on finance), we can help.

Get a quote No impact on your credit score

Rates from 6.9% APR. Representative APR 27.4%

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Tim Carpenter, Dedicated car finance expert
Tim Carpenter Car Finance Expert
5 Years
Total cost of credit £ XXX.XX
Total repayment £ XX,XX.XX
48 monthly
payments of
£ 245 98

Rates from 6.9% APR: the exact rate you will be offered will be based on your circumstances

Representative example: borrowing £6,500 over 5 years with a representative APR of 27.4%, an annual interest rate of 27.4% (Fixed) and a deposit of £0.00, the amount payable would be £188.74 per month, with a total cost of credit of £4,824.37 and a total amount payable of £11,324.37

Rates may differ as they are dependent on individual circumstances. Subject to status.

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