What is hire purchase car finance?
Hire purchase (HP) car finance is a type of car finance which can be used when buying new or used cars. With HP car finance you pay an initial deposit followed by monthly installments and a final ‘option to purchase’ fee.
How does hire purchase on a car work?
For most hire purchase agreements you will put down a deposit which is usually 10% or more of the car’s value. The remaining value will be paid off in instalments spread between 1 and 5 years along with an interest rate on top. The loan will be secured against the car so you will not own the vehicle until the final payment is made.
Other types of car finance include PCP car finance and CS agreements. You can read more about what is hire purchase finance in our guide.
