Finance Products

Hire Purchase

Considering finance options for your next vehicle? Hire Purchase (HP) could be the key to unlocking an effortless route to ownership. Here, we’ll break down how Hire Purchase works, along with its benefits and considerations, to help you make an informed decision. 

What is Hire Purchase?

Hire Purchase (HP) is one of the most widely known and straightforward vehicle finance solutions. It allows you to spread the cost of the vehicle over time through fixed monthly instalments. While the finance company retains ownership of the vehicle during the agreement, you have the option to own the vehicle outright at the end of the term by paying a small final ‘option to purchase’ fee. 

How Does Hire Purchase Work?

With Hire Purchase, you finance the loan amount, plus interest, by making regular payments over an agreed period, typically ranging from 12 to 60 months (or even up to 84 months for extended flexibility). At the end of the term, after fulfilling all payments, you can complete the ownership process by paying the nominal option to purchase fee. 

Hire Purchase infographic

Key Features of Hire Purchase

  • Flexible Repayment Terms

    Choose a term that suits your budget, with a range of options available to tailor the monthly instalments.

  • Low/No Deposit

    In some cases, Hire Purchase agreements require minimal or no upfront deposit, making it accessible for a range of buyers.

  • No Mileage Limits

    Unlike other finance options, HP typically doesn't impose mileage restrictions, allowing you to drive without limitations.

  • Straightforward Process

    The simplicity of HP makes it easy to set up and understand, offering a clear route to vehicle ownership.

  • Credit-Friendly

    If your credit history is less than perfect, HP may be easier to secure than unsecured loans, as the vehicle itself serves as security.

Considerations of Hire Purchase

  • Repossession Risk

    Since the loan is secured against the vehicle, failure to make payments can result in repossession by the finance company.

  • Credit Impact

    Late or missed payments may negatively affect your credit rating.

  • Higher Monthly Payments

    HP payments can sometimes be higher than those in other finance arrangements, such as Personal Contract Purchase (PCP).

Hire Purchase offers a transparent, manageable pathway to owning your next vehicle, with flexible terms designed to suit your financial situation. Whether you’re looking for simplicity, security or long-term ownership, HP might be the perfect solution. 

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