Hire Purchase (HP) agreements are a popular car finance option for anyone looking to buy a used car.
Whilst HP agreements are a relatively simple way to finance your next used car, it’s important you understand what’s involved in order to make sure it’s the right decision for you.
So how does hire purchase work and what does it mean? In this article, we’ll take a closer look at this type of finance and what you can expect when taking out a hire purchase agreement.
What is HP car finance?
Hire Purchase agreements are a type of car finance that allow you to spread the cost when purchasing a vehicle.
HP car finance agreements can be used on both new and used cars, giving you a wide range of choices depending on your needs and preferences.
Rather than paying the entire purchase price in a single lump sum, you’ll be required to pay a deposit followed by fixed monthly instalments over an agreed period of time.
Once all the instalments have been paid, you will have the option to pay a small fee to transfer the ownership of the car from the finance company to yourself.
Following this payment, you’ll then become the legal owner of the vehicle.