What is Hire Purchase?
Hire Purchase is a very popular way of financing either a new or used car. The agreement starts with an initial deposit payment followed by agreed monthly instalments until the value of the car is paid in full.
The length of the term of HP agreements can vary depending on your circumstances, but the advantages are that, at the end of the agreement, you will have full ownership of the car. Your mileage is also irrelevant so you can’t incur any excess mileage charges.
What to consider when considering HP
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.
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’ll need to keep the car properly insured, maintained and in your possession until the full value is paid off.