What is Hire Purchase (HP) & How Does It Work?

Hire Purchase (HP) finance plans are preferred by many motorists for their simplicity. Agreements can be arranged quickly after a deposit has been paid, so you could be behind the wheel of your chosen model much sooner than you think. HP could be the right option if you want straightforward terms and the option to decide whether to keep your car or trade it in at the end of the contract. Here's how it typically works:

• Choose your car.
• Agree the amount to be borrowed based on the price of the car less a deposit.
• Decide upon the length of the agreement.
• Once all the repayments have been made you have three options:
  • Pay the final amount and become the car’s owner
  • Hand back the vehicle
  • Renew your lease and pick a new model.