Can I Buy an Electric Car on Hire Purchase?
Electric cars can be a bit pricier than conventional cars, that’s why many buyers choose to finance their electric cars with Hire Purchase. If you plan on taking the same route, here’s what you need to know about electric car hire purchase and how you can buy your EV in a more affordable way.
How It Works: Electric Car Hire Purchase UK
Hire Purchase for buying electric cars in the UK is one of the popular ways to go. With this type of car finance, you can drive your dream car without having to pay the full price upfront. HP works in much the same way as a loan but it’s one that’s secured against the car’s value. There are a number of electric car hire purchase schemes in the UK so let's explore further.
Before you can get the electric car you want, you would usually have to pay a deposit which is at least 10% of the value of the vehicle. However there are car finance companies that offer zero-deposit car finance deals, but this is usually only available to buyers with very good credit scores. If this is something you want to look into, be sure to check with your car finance company if it’s available. Psst... by the way we do actually offer zero deposit finance here at Carmoola, so if that's what you are looking for, do check out our competitive rates!
After the deposit, the next payments would be the monthly instalments. This is a fixed amount which you have to pay every month for the whole duration of your car finance agreement. When you’ve reached the end of your contract and have made all payments, then the ownership of the electric car will be transferred to you.
In case you encounter a problem with your finances and you think you can no longer afford to continue paying for the car, there is an option to end the car finance agreement. This is called voluntary termination. You may choose this route if you’ve already paid at least 50% of the total amount you’ve loaned. It’s important to inform your car finance company immediately if there are changes in your financial situation that can affect your ability to repay the loan.
Pros of Buying an EV on Hire Purchase
- HP is available for new and used cars, whether they’re petrol or diesel-fuelled, hybrid, or electric cars.
- The cost of the EV is spread across a series of monthly instalments so you don’t have to use up a big chunk of your savings to make the purchase.
- HP has a fixed-rate interest which means you’ll be paying the exact same amount throughout your car finance repayment term.
- It’s relatively easier to get approved for HP car finance if you have a low credit score because the loan is secured against the car, which is not the case with a personal loan.
- Financing a car with HP doesn’t come with mileage limits like Personal Contract Purchase car financing.
Cons of HP Car Finance on Electric Cars
- Even if you’re the one using the vehicle, it is not yours until you’ve made the final payment. This means you cannot modify the car or sell it.
- Missed payments should be avoided because the car finance company can repossess the vehicle to recoup the money they loaned you.
- Monthly payments for HP car finance are usually higher than PCP because they go toward the full cost of the car. PCP monthly payments only cover a part of the car’s value.
- To get the best annual percentage rate for your HP car finance, you need to have an excellent credit score. Generally, the higher your score, the lower the car finance rate. Improving your credit score doesn’t happen overnight so it might take some time to add points to it.
Should I Buy an Electric Car?
Now that you know how Hire Purchase works when financing an electric car, you might still be thinking about the benefits of driving an EV. Yes, they’re more expensive than diesel or petrol-fuelled vehicles but just think of how much cheaper it is to drive. Electricity costs a lot less compared to fuel, plus you can enjoy tax benefits as well. So, even if the price tags of electric cars are higher, you can save more money overall. And of course, you can do your part in helping the environment by choosing a green car.
Can I Take Long Drives with an EV?
Absolutely! You might have heard some misconceptions about electric cars and how you can’t drive long distances without having to stop and recharge the batteries. This is not true at all because EV technology is continually improving, which means electric cars are more powerful in terms of speed, acceleration, and mileage.
Electric cars are perfect for driving in the city but you can also drive them for your longer journeys. Whenever you need a break from driving, you can stop by a charging point and then enjoy a cup of coffee so that both you and the car can recharge. With so many fast chargers all over the UK, you don’t have to wait for hours just to get the EV ready to get back on the road.
So, can you buy an electric car on Hire Purchase in the UK? Definitely! If you want to save money on your purchase, consider getting a second-hand electric car. The EV used car market is booming now, so you’re sure to find a good one that fits your needs and budget. And with Hire Purchase car finance, buying an electric car will be even more affordable and budget-friendly. And great for the environment too! 🍃😀