HP
Car Finance

Car Loans | CarFinance 247
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No impact on your credit score
Rates from 7.9% APR. Representative APR 21.9%
Car Loans | CarFinance 247
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What is 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 all yours. 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
5 years
Total cost of credit £ 2000
Total repayment £ 2000
48 monthly
payments of
£ 245 98

Rates from 7.9%: the exact rate you will be offered will be based on your circumstances, subject to status.

Representative example: borrowing £6,500 over 5 years with a representative APR of 21.9%, an annual interest rate of 21.9% (Fixed) and a deposit of £0.00, the amount payable would be £172.09 per month, with a total cost of credit of £3,825.54 and a total amount payable of £10,325.54.

We look to find the best rate from our panel of lenders and will offer you the best deal that you’re eligible for. We don’t charge a fee for our service, but we do earn a commission. This does not influence the interest rate you’re offered in any way.

How does HP finance work?

If you’re looking to buy a car on HP, you’ll need to pass a credit check first.

That doesn’t mean you won’t be able to get HP car finance with bad credit. We work with a panel of lenders so that we can look to help people with a range of credit histories, including those with a poor credit score.

What are the pros and cons of HP?

Pros:

  • You'll own the car after you make all the repayments
  • There are usually no restrictions on how far you can drive
  • You might need to pay an Option to Purchase fee but there's no big balloon payment
  • Agreements can last anything from 1 to 7 years

Cons:

  • Monthly payments might be higher than they would with other car loan options
  • You can't sell or modify the car during your agreement without the lender's permission
  • You won't own the car until you've made all the payments
  • The future value of your car isn't guaranteed like it can be with PCP

Is HP the right option for me?

Always check your agreement for any restrictions, but buying a car on HP could work for you if:

  • You want to own your car outright
  • You want to keep the same car for a while
  • You need to drive a lot of long distances

Looking for more details? Head over to our blog where we get under the hood of HP car finance with our complete guide.

Compare Hire Purchase vs. Leasing

Choosing between hire purchase and leasing? While we don’t currently offer leasing, that doesn’t mean it couldn’t be right for you. Here’s what you need to think about:

Do you want to own the car?

At the end of your HP car finance agreement, you’ll own your car, but with leasing, you never will! If changing car regularly is more important to you than owning a car, leasing might be a good fit for you.

Do restrictions apply?

Leasing can come with terms and conditions including restrictions on how far you can drive and what condition you need to keep the car in. If you drive a lot of long distances, a hire purchase agreement (with no mileage restrictions) could suit you better.

If neither hire purchase nor leasing sounds quite right, there is a middle ground. Find out more about lease purchase – known as hire purchase with balloon – over on our blog.

Compare Hire Purchase vs. Personal Loan

Torn between hire purchase and a personal loan? Here’s what you need to know:

Do you want to own the car?

Both these car finance options include car ownership. The difference is that with a personal loan you’ll own the car as soon as you pay the seller, while with hire purchase it won’t be all yours until the end of your agreement. If you might want to sell or modify the car before you’ve paid off your full loan, a personal loan might give you the flexibility you need.

How much do you want to pay?

Personal loans can come with higher interest rates than other forms of finance, including HP. This may make your monthly payments with a personal loan – and the amount you pay back overall – higher too. If you’re looking for a lower rate, hire purchase may be a better choice for you.

Why come to us for hire purchase finance?

For us, used car finance is all about helping people improve their everyday lives.

Whether it’s sorting out the school run, getting that big boot for the big shop, or just a car you’re proud to park outside the office, we work to get the right HP deal for you.

With our panel of lenders, we can look to find hire purchase loans for people with good credit, bad credit, and somewhere-in-between credit.

Plus, you’ll have a dedicated account manager on hand to help you through the process.

What’s next? How to apply for a hire purchase deal

Whether you’re looking for a Peugeot on PCP, a Honda on HP, or a personal loan for a Land Rover, we could help!

It starts with a quote. If you’re approved in principle, your account manager will give you a call to talk through your options. No strings attached. They can answer any questions you have and grant you access to our car search – a treasure trove of over 130,000 used cars ready and waiting to find a home. Found a car somewhere else? We can still help – just let your account manager know.

Ready to start?

Applying with us only takes a couple of minutes and won't affect your credit score

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* The UK's number one online car finance broker by unique users to the website. Based on Hitwise data – 1,746,657 to CarFinance 247 vs. 666,020 for nearest competitor. January to December 2019.

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. Registered office: Universal Square, Devonshire Street North, Manchester, M12 6JH. Registered in England. (Registration Number 06035525).

CarFinance 247 is authorised and regulated by the Financial Conduct Authority for insurance distribution and credit broking (Firm Reference Number: 653019). CarFinance 247 is registered with the ICO (Registration Number Z1897658).

Finance is subject to status and is only available to UK residents aged 18 and over. Written quotations are available on request.

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