Hire Purchase (HP) car finance

Here’s what you need to know to help you decide if a Hire Purchase (HP) deal is right for you.

How HP works

HP is a finance agreement that allows you to spread the cost of buying a car over an agreed period of time. You pay a deposit followed by fixed monthly instalments until the agreement comes to an end. There also won't be any excess mileage fees.

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A HP deal might be right for you if you:

  • Want to own the car without making a large final payment when the agreement ends.

  • Are happy to pay higher monthly payments than a PCP agreement as there isn’t a large final payment.

  • Like to know exactly how much you’re paying every month.

You can estimate your monthly payments and find the right finance deal for you with a HP finance calculator.

When you apply for a HP agreement, a hard credit check will be completed, however the process varies between lenders.

What happens at the end of the HP agreement?

You’ll likely have to pay a small 'Option to Purchase' fee at the end of your agreement, which typically costs between £1 and £10. This covers the cost of transferring ownership of the car over to you.

After all monthly payments and the 'Option to Purchase' fee have been made, you'll become the legal owner of the car.

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