Hire Purchase (HP) Car Finance

What is hire purchase?

Hire Purchase is the longest standing, most established vehicle financing method available. Over an agreed term, you will repay the capital cost of your new vehicle in monthly installments along with interest incurred.

Easy to understand, HP finance is available to both individuals and companies, and is particularly attractive if you ultimately want to own your new car. It allows you to spread the cost over a period of time, which can help you to budget.


How does HP finance work?

Hire Purchase is perhaps the easiest to understand of all car finance options, and the process of buying a new car on HP is simple:

• Find your new car - this will give you the amount you want to borrow

• Pay a deposit based on a percentage of the car's value

• You will then pay fixed monthly payments over a specified period

• Your new car is owned by the finance company until you've made all payments

• At the end of your contract - and once you've paid the option to purchase fee - you'll own the car outright


Should you get an HP finance deal on a new car?

There are a number of benefits to HP finance - although in general they are the preferred option for buying used, rather than new, cars. You can spread the cost in order to budget more effectively, the arrangement is relatively simply and flexible. Unlike other finance options, like PCP, you'll own the car once you've made all the payments. Finally, HP finance is potentially more accessible if you've been turned down for a personal car loan, as the loan is secured against the car.

Other finance options may be more advantageous, however. Monthly payments are higher than with PCP finance, while rates can be higher than with car loans. In addition, you won't be able to sell the car until you own it outright (unless you get the finance company's permission).

Browse our full range of new cars and discount vans - from small city cars and family-friendly hatchbacks to practical MPVs and innovative SUVs. Get in touch with us to find out more about the new car hire purchase deals available.