HP

Hire Purchase

Hire Purchase (HP) is a type of car finance that allows you to drive a new or used car for a set period of time (usually 24-60 months) without having to pay the full amount upfront.

Instead you make monthly payments to pay off some of the capital borrowed and interest:

Own the car outright at the end of the agreement for the option to buy with no final balloon payment.

Benefits of HP finance

Sometimes possible to have no or low deposit (although you may be offered a lower interest rate if you make a deposit).
Fixed monthly payments for the agreed term.
No mileage restrictions.
You own the car once you have made all of the monthly payments and the final option to purchase fee.

Drawbacks of HP finance

Higher monthly payments than a PCP agreement.
You are responsible for the maintenance and upkeep of the car.

Who is HP finance suitable for?

Want to own the car outright.

Things to consider before taking out HP finance

Make sure you can afford the monthly payments.

Overall, HP finance can be a good option for people who want to drive a new or used car without having to pay for it upfront and want to own the car outright. However, it’s important to be aware of the drawbacks, such as the higher monthly payments compared to PCP or other products with a balloon.