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:
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.
Always check your agreement for any restrictions, but buying a car on HP could work for you if:
Looking for more details? Head over to our blog where we get under the hood of HP car finance with our complete guide.
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.
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.
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.
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.
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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