Hire Purchase (HP) agreements allow you to spread the costs of your new car over one to five years and take full ownership at the end of the term.
Hire Purchase is the ideal funding solution is you want to own the vehicle at the end of the finance agreement. HP splits the whole cost of the car into fixed monthly payments and a deposit at the start of the agreement - with you taking official ownership of the car as soon as you've made the last monthly payment.
While HP finance agreements often have higher monthly payments and deposits than other finance deals, you will avoid needing to pay a hefty lump sum at the end of the contract (GFV or Final Optional Payment) as you do with PCP.
Until you take ownership of the vehicle the finance company officially owns the car, but, as the registered keeper of the car, you will be responsible for insuring and maintaining it. A Hire Purchase holds lower risk for the finance company than other types of loans, as the lender is secured against the car. This means HP is sometimes available to individuals who have been turned down a regular loan.
HP car finance is ideal for you if you want to own the vehicle but would rather split the payment costs over a few years instead of paying the outright. Additionally, you can settle the agreement at any time by paying the remaining costs.