Hire Purchase (HP)
Hire Purchase is the longest standing, most established vehicle financing method available. Over an agreed term, the customer will repay the capital cost of their vehicle in monthly installments along with interest incurred.
There are three factors which determine the monthly repayments. The total deposit payable, the period of the contract and the sale price of the vehicle. So for example if you were looking to lower the monthly repayments you would need to either place a larger deposit, or increase the term of the loan.
It is upon settlement of the contract that the vehicle becomes the property of the customer.
Benefits of HP to the private individual:
- No large deposit necessary.
- Fixed interest rate.
- Fixed monthly repayments.
- Own the vehicle outright at the end of the contract.
Benefits of HP to business':
- Gain another credit line.
- Do not have to pay VAT on repayments or Tax on interest charges.
- Get writing down tax allowances.
- Can put working capital to good use.
- Gain a Balance Sheet Asset.
Historically manufacturers tend to introduce price increases around the end of the summer. We would strongly advise our customers to place their orders early to protect themselves from any potential price increases and to ensure an early 58 registered delivery.
