What is a Hire Purchase Agreement?

Tim Carpenter
Written by Tim Carpenter

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.

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Rates from 6.9% APR. Representative APR 27.4%

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96% of our customers recommend us: † Based on feedback left on independent review site Reviewcentre. May 2019.

CarFinance 247 is a trading name of CarFinance 247 Limited, a credit broker and insurance intermediary, and 247 Money Group Limited (247 Money), a lender. Both companies are part of the 247 group of companies.

CarFinance 247 is authorised and regulated by the Financial Conduct Authority under reference number: 653019. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 06035525. Data Protection Registration Number Z1897658.

247 Money is authorised and regulated by the Financial Conduct Authority. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. Company registration no. 10989530. Data Protection Registration Number ZA456831.

All finance is subject to status and income. Written quotations on request. CarFinance 247 can introduce you to a limited number of finance providers, including 247Money, based upon your credit rating and will receive commission for such introductions.

† We do not charge a fee for arranging the finance, however some of our lenders may charge a fee. Your account manager can provide more information on this

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