Hire Purchase Finance
What is Hire Purchase finance?
Hire Purchase (HP) car finance is a type of instalment plan that allows you to pay for a car through a series of regular payments over a fxed period of time. Hire purchase dealers typically require a deposit payment, followed by a set number of monthly instalments which must be paid until the full cost of the vehicle, plus interest, has been paid.
When considering whether HP finance is right for you, it is best to weigh up the advantages and disadvantages:
Advantages of hire purchase deals
- An affordable way to buy a car without making a large upfront cash payment
- Allows you to become the vehicle owner once all repayments have been made
- The interest rate is usually fixed, so the repayments remain the same throughout the agreement
- Fixed monthly repayments make budgeting easier and more predictable
- HP agreements are often flexible, enabling you to choose a repayment period and deposit amount that suits your budget
- No mileage or usage restrictions, unlike leasing or personal contract purchase (PCP) finance
Disadvantages of hire purchase deals
- You will not own the car until the final payment is made, which means you cannot sell or modify the car until then
- The car can be repossessed during your agreement period if you do not make the repayments
- Monthly repayments will be higher than other types of finance, such as PCP but this is due to the car being yours at the end of the agreement
Do you keep the car at the end of HP finance?
Yes, you will own the car at the end of your hire purchase agreement. During the agreement period, the vehicle will legally belong to your finance provider, but at the end of the agreed term, you will have paid off the total cost of the car and any interest or fees included in the finance agreement and ownership can officially be transferred to you.
Can you pay off HP early?
Yes, it is possible to pay off a hire purchase car finance agreement early and take ownership of the vehicle before the end of the period set by you and your lender. If you wish to do this, you will need to contact the finance company to obtain a settlement figure, which is the amount you will need to pay to settle the agreement in full. Before you enter into the HP agreement, it is best to check whether your lender charges any additional fees for early settlement.
Why should I finance my car with Bob Davies?
Bob Davies Car Sales is an experienced and trusted used car dealership and we specialise in used car finance Wales. We work with a variety of finance providers to compare and secure the best possible deals for our customers, offering competitive hire purchase quotes with rates starting from just 8.9%
How do you apply for HP finance?
If you are interested in applying for used car finance Wales, head to our finance page for more information about how you can apply for car finance with us! You can also start by choosing a used car from the huge range on our website, and apply from the vehicle details page.
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