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Getting a car on Hire Purchase

Hire Purchase is a popular type of car finance agreement amongst UK drivers. It’s one of the most straightforward car finance types and can suit a whole range of different drivers. Whether you are looking to get a hire-purchase agreement or are just curious about the different ways to obtain a car loan, we have a fantastic guide for you below!

What is Hire Purchase Car Finance?

Hire Purchase is one of the ways in which you can buy a car on finance. You may have heard that Hire Purchase usually requires you to put down a deposit; however, you will be pleased to hear that we can arrange no deposit car finance on a lot of our car finance packages, giving you the choice. You then enter into an agreement to repay the cost of your online car finance over a fixed term, usually in monthly instalments.

Whilst you’re repaying the finance you don’t technically own the car but as soon as you’ve made your final payment, ownership of the car transfers over to you. It’s as easy as that! Hire-purchase deals can also be used to finance a range of vehicles including vans and caravans.

Advantages of Hire Purchase

✔ No deposit — take out an agreement without any down payment

✔ You get to own the car once you’ve made all the repayments

✔ Fixed interest rates, so you know exactly what you’re paying for the duration of your car loan

Good credit and all credit circumstances considered.

How does Hire Purchase car finance work? 

Hire purchase is a simple yet effective form of secured loan. This means the lender owns the car throughout the agreement and has the right to take the car if you fail to stick to the rules of your finance agreement. You borrow an amount from the lenders to cover the cost of your chosen car plus the interest rate offered and then pay it back in equal monthly payments over a chosen term. Hire purchase car finance deals can be spread over 3-5 years and can be flexible to your monthly budget. Once the agreement comes to an end, there is a small option to purchase fee to pay if you wish to keep the car. Ownership is then transferred to you and you can keep the car you love with no more payments to be made. 

HP finance calculator

Hire Purchase Calculator

If you’re thinking of taking out a Hire Purchase agreement to finance a new or used car, you can calculate your payments using our free online car finance calculator.

We’re really proud of our car finance calculator — it’s pretty nifty if we do say so ourselves. It gives you the option of finding out your credit score if you’re not sure what it is by performing a soft search application, (which means it won’t harm your credit report!). You can enter your monthly budget to find out how much you can lend, so it’s never been easier to find a car that you can afford!

Who is HP car finance suitable for?

If the idea of owning your vehicle once you have made all your repayments is important to you then a hire-purchase agreement is a great option. It is generally expected that you will own the vehicle at the end of your agreement, therefore there are no mileage restrictions or other service requirements. However, you can’t sell your vehicle throughout the policy as the car finance provider will own your vehicle up until you complete all required payments. That said, you do have the right to ‘voluntarily terminate’ the credit agreement should you need to, but you will need to hand the vehicle back and have paid at least half of the total amount owed.

Read more – Car lease or car finance – which is best?


How does HP finance work with UK Car Finance? 

Hire purchase finance is easy with UK Car Finance! You can apply for finance in just 3 easy steps…

apply online for finance

1. Get a free quote

Fill in our application form and get a free, no-obligation finance quote.

select car finance package

2. Select the best finance package

Choose the best HP deal from one of our trusted UK lenders.

choose the right car

3. Choose your car! 

Get the car you want from any FCA approved UK dealership.

pay for your car

Is there a fee to take ownership?

Hire-purchase agreements do include a small Option to Purchase Fee. This amount is usually very small and allows you to take the title to own the vehicle. Since you have already paid all your payments and the fee is usually very small in comparison the vast majority of people tend to pay this to take full ownership. However, you do not have to and can choose to hand the vehicle back instead.


Things to consider before opting for a Hire Purchase Car Finance Agreement:

  • If you are unable to meet your monthly repayments you may need to hand the car back.
  • The monthly payments can be higher than a PCP agreement.
  • You won’t be able to sell or modify the car until you finish the agreement and take ownership of the vehicle.

HP car finance made easy!

If you’re unsure of any of the popular car finance jargon used on our page, find out more on our dedicated finance jargon buster page

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