Hire Purchase

Car Finance & Car Loans FAQ's

• What does HP stand for?

  HP stands for Hire Purchase. You do not own the vehicle until you have paid the last monthly payment, you effectively 'hire' the vehicle during the HP agreement term, until the final payment when you own the car outright.

• What to look for in an HP deal?

  An HP agreement is made up of 2 elements.

  1. A deposit, which is paid at the beginning of the agreement.
  2. Monthly payments, which are paid during the lifetime of the agreement.

• Who owns the car on an HP car finance deal?

  During the contract, the vehicle is owned by the finance company, once you pay the final payment you own the car outright.

• How long does an HP agreement run for?

  HP agreements usually run between 36 to 60 months (3 years to 5 years).

• Can I settle my HP loan early?

  Yes, you can settle your HP agreement early, however this may be subject to penalty charges.

• Is there a balloon payment?

  No, once you finish the contract you own the car outright.

• Can I switch cars during my HP agreement?

  No.

• Are there annual mileage charges in an HP agreement?

  No, there are no excess mileage charges with an HP agreement.

• Do I need a deposit for an HP deal?

  No, it is recommended that you put down a deposit. The size of the deposit effects the size of the monthly payments. The larger the deposit, the lower the monthly payments.

• What is the difference between HP and PCP?

  HP (Hire Purchase) is a finance plan that allows you to spread the cost of the car by making monthly payments over an agreed term. You make higher monthly payments than a PCP agreement, so that when you come to the end of the agreement you'll own the car. Unlike PCP, there are no limits on mileage. HP could be right for you if want to own the car at the end of the agreement, without the need to make a larger final payment.

  PCP is a finance plan where you make equal monthly payments over an agreed term, with a larger final repayment due at the end if you decide to keep the car. At the end of the agreement, you have three options. You can hand the car back to the finance company (the car must be in good condition and within the agreed mileage, otherwise charges may apply), part exchange it for another car on a new agreement (subject to status), or pay the final repayment to own the car. PCP could be right for you if you're thinking of changing your car in the next few years, or if you're unsure whether you want to buy the car at the end of the agreement.

• What credit score do you need for HP finance?

  HP agreements can be offered to people with a whole spectrum of credit scores. However, the higher your credit score, the more likely you are to be accepted.

• Can you sell an HP car?

  Yes, but only once you have completed your final payment.

• Can you change from HP to PCP?

  No. Once you have signed up to an HP agreement, you are not able to change your mind and switch to an alternative finance product mid-term.

• Can you extend an HP agreement?

  This is possible, but it would constitute a new HP agreement. A new HP agreement is subject to status at the time of application.

• Can you modify a car on HP?

  No.

• Can you part exchange a car on HP?

  Only once you have made the final payment and own the car outright.

• Can you get HP on a used car?

  Yes, HP agreements are available on both new and used cars, as long as they meet the criteria set out by the finance provider.