HP
Car Finance

Car Loans | CarFinance 247
Get my quote
No impact on your credit score
Rates from 7.9% APR. Representative APR 19.9%
Car Loans | CarFinance 247
Trustpilot logo
Trustpilot 4 Half Stars
4.6 out of 5

Rates from 7.9% APR: 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 19.9%, an annual interest rate of 19.9% (Fixed) and a deposit of £0.00, the amount payable would be £166.07 per month, with a total cost of credit of £3,464.37 and a total amount payable of £9,964.37.

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.

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 vehicle, 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 loan period.

How much you’ll pay each month will depend on:

  • The size of your deposit
  • The length of your agreement
  • The interest rate
  • The car you choose

What is HP Car Finance?

Considering HP Car Finance? Watch this short video to find out how hire purchase agreements work, the pros and cons, and whether it could be the right solution for you.

How does HP finance work?

A Hire Purchase (HP) finance agreement works by providing a loan to cover the cost of your new used car minus any deposit. You will then repay the loan in affordable monthly payments plus interest, and your agreement will typically last between one and five years. Once you’ve reached the end of your loan term and paid the final ‘Option to Purchase’ fee, you’ll own the car outright.

If you’re looking to buy a car on HP, you’ll need to pass a credit check first, but you can still secure a loan even if you have a less-than-perfect credit history.

Can you get hire purchase with bad credit?

Yes! You can get HP car finance with bad credit - and it may be one of the more accessible finance options available to you. While your monthly repayments could be higher than they would be with other finance options, you’ll own the car at the end of your loan term and consistently making your repayments on time could help improve your credit score. At CarFinance 247, 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 advantages and disadvantages of HP?

A car finance loan can help break down the cost of your new used car, but hire purchase isn’t the best choice for everyone. Check out some of the advantages and disadvantages of HP car finance:

Advantages of hire purchase:

  • 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 5 years

Disadvantages of hire purchase:

  • 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 – also 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 the best hire purchase deal?

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 find you the best hire purchase deal from 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.

Frequently asked questions

Hire Purchase or HP is available to both private buyers and companies who are looking to purchase a car and own it outright. A finance agreement like HP allows you break down the vehicle’s cost into affordable fixed monthly payments. You are eligible to apply for a hire purchase loan if you’re over 18 years old and have a minimum of three years’ address history in the UK.


The reason why you might find it easier to get HP car finance rather than a personal loan is because hire purchase loans are secured against the vehicle. That means that if you were to stop making your repayments, the finance company could take ownership of the car. You can also put down a deposit and reduce the amount you’ll need to pay back. A personal loan does not include a deposit and is not secured against the vehicle and so you may need to have a higher credit score or financial history that demonstrates that you’ll be a reliable borrower who is unlikely to miss any repayments.


With a hire purchase (HP) agreement, you can pay off your loan early if you pay the settlement figure. This is the amount of money it will cost to pay off your loan in full and is usually made up of the remaining loan amount plus interest. Your finance company will be able to let you know how much this will be. The further you are into your agreement, the lower your settlement figure may be. Don’t forget to check the terms of your loan to find out whether you’ll need to pay a fee for settling your finance early.


The Option to Purchase fee is an amount of money that you may need to pay at the end of your hire purchase agreement to cover admin costs and officially become the car’s owner. This is typically a much lower amount than a balloon payment would be with a PCP agreement.


To sell a car on hire purchase, you’ll need to either wait until the end of your loan term and you own the car or request the settlement figure to end the agreement early. This is because HP car finance is secured against the vehicle and the finance company owns it until you’ve made all the repayments. This means that you can’t sell the car or make any major modifications during your agreement.


The cost of your HP agreement will depend on how much you want to borrow, how long you need to pay it back, and your credit score. Typically, HP monthly repayments are cheaper than they would be with a personal loan as the finance is secured against the vehicle. However, you won’t own the car until you’ve finished making all your payments.


Putting down a deposit when buying a car can reduce the amount you need to borrow and increase your chances of securing a loan. In a typical hire purchase agreement, you can put down a deposit of 10% or more of the car’s value. However, if you don’t have any money saved or a vehicle to part-exchange than you may be able to find a no deposit hire purchase deal.


The best way to finance a car depends on your individual circumstances, the car you’d like to buy, and how you plan to use it. If car ownership is important to you then buying outright, choosing a personal loan, or opting for a hire purchase agreement might be the best choice for you. However, if you like to change car regularly and prioritise lower monthly repayments over owning a car then personal contract purchase (PCP) could give you more options at the end of your agreement.


When you buy a car on finance it might affect your credit rating temporarily as you’ll be taking on a relatively large new debt. However, successfully managing your car finance and making all your payments on time could improve your score over time as it proves you’re a reliable borrower.

Lenders will also make a hard search on your credit report as part of the loan application process. Too many hard searches in a short time can negatively impact your credit score. However, this doesn’t have to stop you getting the best deal for your car finance. When you apply with CarFinance 247, we’ll run a soft search with no impact on your credit score to find out if we can find you an approval in principle from one of the lenders on our panel. It’s only if you choose to proceed with the loan offered that a hard search would take place.


When applying for hire purchase finance with CarFinance 247, you will be asked to provide the following details and documents:

  • Personal details including your full name, marital status, date of birth, and address history
  • Employment details and history
  • Estimated amount you’d like to borrow
  • Email address and phone number
  • Driving licence
  • Proof of address
  • Proof of income

If you can’t afford your HP repayments and you have already repaid 50% of the total amount payable, then you have the right to voluntarily terminate your agreement and hand the car back. The total amount payable doesn’t just mean the amount you’ve borrowed, it also includes any fees or interest. If you want to keep your car, you may be able to reduce your monthly payment amount by applying for a refinance loan. When you refinance, you take out a new finance agreement, usually with a new lender, to pay the balance on an existing hire purchase loan. You might be able to swap to a loan with cheaper monthly repayments and a longer repayment period instead.


Ready to start?

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

Get in touch

Contact us
Get my quoteNo impact on your credit score
Rates from 7.9% APR. Representative APR 19.9%
Trustpilot logo
Trustpilot 4 Half Stars
4.6 out of 5
Trustpilot logo
Trustpilot 4 Half Stars
4.6 out of 5

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 19.9%, an annual interest rate of 19.9% (Fixed) and a deposit of £0.00, the amount payable would be £166.07 per month, with a total cost of credit of £3,464.37 and a total amount payable of £9,964.37.

We look to find the best rate from our panel of lenders and 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.


* 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.

This site uses cookies so that we can provide you with the best user experience. By continuing to use the site you are consenting for cookies to be used. Further information on cookies and how you can disable them is available on our cookie policy.