From personal contract hire to hire purchase and a loan, there are many ways to buy a car in the UK. Hire purchase (HP) is often a popular choice amongst consumers who want to pay a lower deposit and monthly instalments until the car is paid off (much like a house with a mortgage). But if you're new to the world of HP, you might be wondering about how it all works. That's the purpose of this guide, which has everything you need to know about buying a car on a hire purchase agreement.
Here's how to buy a car on a hire purchase agreement
Buying a car on a hire purchase agreement is similar to getting a mortgage on house. You pay an upfront deposit (usually a minimum of 10%) and then make monthly payments until the car is paid in full. You can get a hire purchase agreement through the dealership or by using a broker, who will search the market and find the best deal depending on your requirements.
Should I buy a car on a hire purchase agreement?
Whether or not you buy a car on a hire purchase agreement depends on your personal situation. Hire purchase finance means you can buy a car with a lower deposit and make regular monthly payments until it's paid off or you voluntarily cancel the agreement when 50% of the car is paid. At this point, you hand the keys back to the car finance company. For many, HP is a cheaper way for them to buy a car they couldn't afford outright.
Can I buy a used car on hire purchase?
If you're looking to save money on your next car, then you might want to consider using hire purchase finance. Fortunately, you can buy a second-hand car using HP and make monthly payments until you pay off the finance. If you pay off the entire amount owed, you'll be he outright owner of the car. Purchasing a car on HP means you can benefit from affordable prices, access to better cars, longer manufacturer warranties and more.
Best cars to buy on hire purchase
Hire purchase gives drivers the option to buy a new or second-hand car with finance and spread the costs. And while you can buy all sorts of vehicles using HP, these are our favourite options: Audi A3, BMW 1 Series, Skoda Octavia, Volkswagen Tiguan and Peugeot 308. You can usually find good deals on these vehicles, and they offer a wide range of styles designed to please to please a variety of drivers.
Can I buy an electric car on hire purchase?
Electric cars are growing in popularity, with many drivers making the switch from fuel to an EV. If you want to finance your electric car, then you're in luck. You can buy an EV using hire purchase finance and pay a lower deposit while making regular monthly payments until paid for in full. At this point, you become the full owner of the vehicle.