What is Hire Purchase (HP)?

Hire Purchase is a way to finance buying a new or used car. You will normally pay an initial deposit and will pay off the entire value of the car in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the car outright.

What are the advantages of HP?

• You’ll be able to drive away a car that you may not have managed to buy outright.
• Unlike a PCP or PCH contract, you won't need to estimate your mileage at the start of your Hire Purchase agreement, so you'll avoid excess mileage charges.
• Once you’ve made your final monthly payment, including the option to purchase fee, you'll have full ownership of the car.

What should you consider when opting for HP?

• Monthly payments may be higher than some other finance options, such as PCP, as you're paying off the full value of the car.
• You won’t be able to sell the car without settling the finance.
• You won’t own the car until you have made all of your repayments.
• You’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.​