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HP Car Finance

Looking into HP financing? Here’s everything you need to know about Hire Purchase car finance.

What is Hire Purchase?

Hire Purchase (also known as HP) agreements make it easy to spread the cost of your new car over 1-5 years so you can take full ownership of the car once the contract has ended.

If you want to own the vehicle by the end of the agreement, Hire Purchase is a great option. HP divides the total cost of a car into fixed monthly payments, along with a deposit at the start of the agreement. You’ll officially own the car as soon as you’ve made the last payment!

While HP finance agreements may come with higher monthly payments and deposits compared to other finance options, it allows you to avoid making a large lump sum payment at the end of the contract (final optional payment or GFV), which is often required on a PCP agreement.

When do I become the official owner of the vehicle?

Until you have made the final payment in your agreement, the finance company is the official owner of the car. However, as the registered keeper, you are fully responsible for insuring and maintaining the car.

A Hire Purchase agreement tends to be lower risks for the finance company than other types of loans as they are secured against the vehicle which often means that HP might a better option for those who face challenges securing the other types of agreements.

Benefits of a Hire Purchase agreement?

Hire Purchase is popular for used car finance and offers a number of advantages.

Better finance acceptance rate.

You might find it easier to get HP loans compared to standard unsecured loans, especially if your credit history isn’t perfect, since the vehicle acts as collateral.

Gives your control over your finances.

It's a more budget-friendly approach to owning a new car, allowing you to spread the cost over flexible terms ranging from one to five years.

Opportunity to change your mind.

If you ever decide that the car isn't for you, you can terminate the agreement and return it after repaying at least half of the total amount owed.

Pay off at any time.

If you want to take full ownership of the vehicle, you can pay off the entire loan at any time without any extra fees.

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Financial disclosure

Bugle Inn Motor Company Limited t/a Chorley Group is an appointed representative of ITC Compliance Limited which is authorised and regulated by the Financial Conduct Authority (their registration number is 313486). Permitted activities include advising on and arranging general insurance contracts and acting as a credit broker not a lender.

We can introduce you to a limited number of finance providers. We do not charge a fee for our Consumer Credit services. We do not act as a financial adviser, or fiduciary. We act in our own interest, whichever lender we introduce you to, we will typically receive commission from them based on either a fixed fee or a fixed percentage of the amount you borrow. Any and all commission amounts will be fully disclosed to you as part of your sales journey. You will be required to give your fully informed consent to our receipt of this commission. By doing this, you acknowledge that you understand our role as a credit broker, and that we will receive a financial incentive if you take out a loan from a lender that we introduce you to. All finance applications are subject to status, terms and conditions apply, UK residents only, 18s or over, Guarantees may be required.