What is Hire Purchase (HP)?

​Hire Purchase is a way to finance buying a new or used vehicle. You will normally pay an initial deposit and will pay off the entire value of the vehicle in monthly instalments. When all the payments are made, the Hire Purchase agreement ends, and you own the vehicle outright.

Find and finance your next vehicle through HP

What are the advantages of HP?

You’ll be able to drive away a vehicle that you may not have managed to buy outright.

Unlike a PCP or PCH contract, you won't need to estimate your mileage at the start of your Hire Purchase agreement, so you'll avoid excess mileage charges.

Once you’ve made your final monthly payment, including the option to purchase fee, you'll have full ownership of the vehicle.

What should you consider when opting for HP?

Monthly payments may be higher than some other finance options, such as PCP, as you're paying off the full value of the vehicle.

You won’t be able to sell the vehicle without settling the finance.

You won’t own the vehicle until you have made all of your repayments.

You’ll need to keep the vehicle properly insured, maintained and in your possession until the full value is paid off.

Can I settle my HP agreement early?

The short answer is yes, you can end your finance early. There are different provisions within each finance agreement that allows you to do just that. If you have got through two-thirds of the way through your finance agreement, the options to end the finance agreement early open up.

For a Hire Purchase agreement, there is an option of paying it off early through a settlement fee. A settlement fee covers the cost of any remaining unpaid instalments and interest payments remaining on the agreement. Once the settlement fee is paid, you take full ownership of the vehicle early.

Under a Personal Contract Purchase agreement, you can also pay a settlement fee for bringing the agreement to an end early. After that, you can choose to hand the vehicle back or you have a second option. Through a PCP agreement, you can take full ownership of the vehicle by paying off the remaining Guaranteed Minimum Future Value also known as a balloon payment.