Buying a Car with a Hire Purchase (HP) Agreement

Hire purchase (HP) is a way of buying a car on finance, where the loan is secured against the car. Some car dealerships require a minimum deposit, then you make fixed monthly payments over an agreed term.

Buying a car with a HP finance means you don’t own the car until the last payment has been made.

Pros of a Hire Purchase Agreement

• Car dealerships generally incentivise their HP and PCP offerings with deposit contributions or preferential interest rates
• Flexible payment terms (usually ranging from 12 to 60 months)
• You can get the car sooner without having to save up first
• You own the car after the last payment has been made
• HP is generally better if you want to own the car at the end of the agreement

Cons of a Hire Purchase Agreement

• You don’t own the car until the final payment has been made
• Your credit score might affect which offers you are entitled to
• Monthly payments are usually higher in comparison to those offered on PCP agreements