Hire Purchase (HP)

A Hire Purchase plan for car finance works on a simple basis.

With HP finance, you effectively get a loan to pay for a new or approved used car, and spread payments out across the length of the agreement. You make payments every month until the end of the term.

With a Hire Purchase agreement, the length of the plan is typically longer than a PCP deal – it might be up to five years (60 months), though you can usually set the schedule to suit your means.

Spreading payments out over a longer period of time means you’ll be paying less each month, but usually more in the long run, over the term of agreement, because of the interest applied to the loan.

What you choose may depend on how much you can afford to pay each month.

In most cases, a deposit payment is needed with HP finance plans, though some finance deals may offer a deposit contribution, lowering the monthly payments, and sometimes, low or zero deposit offers are available.

The amount you pay as a deposit will have an impact on the subsequent monthly payments. If you can afford to put down a larger deposit, you’ll have less to pay back over the course of the agreement and less to pay in interest due to the loan amount being lower.

Unlike PCP, there aren’t any restrictions on the number of miles you can drive every year, meaning you won't be subject to an excess mileage charge. If you prefer the freedom of Hire Purchase, this could be the best option for you.

It’s also a good finance option if you want the security of knowing that you’re paying towards the eventual ownership of the car.

Applying for HP car finance with Dick Lovett is a quick process – you can be approved in a few short steps:

1. Explore our collection of new and approved used cars, available online and across our dealerships.

2. Apply for HP finance, undergoing a credit check. Agree the deposit, monthly repayments, and repayment schedule – between 12 and 60 months.

3. When everything is in place, simply collect your new vehicle and drive it away.
 

At the end of your Hire Purchase agreement, the car is officially yours. This is the key difference to a PCP deal, which needs a final – and usually large – payment if you want to buy the car outright.

With HP finance, because you’ve fully paid the value of the car over the course of the loan agreement, provided you’ve made all monthly payments as required, there’s nothing more to pay.

You now completely own the car and are free to continue driving it, or, if you prefer, sell it or part exchange its value against a new purchase. 

Discover the latest car finance deals and offers at Dick Lovett here.