Hire Purchase Car Finance Deals
Hire purchase is a popular way to finance a car, and they make up a significant portion of the 2.4 million vehicles currently on the road purchased with finance. If you're thinking of buying your next car, whether new or used, with hire purchase, you'll want to ensure you get the best possible. That's where we come in with this complete guide to hire purchase car finance deals. From where to find great offers, to the best available vehicles, read on to discover everything you need to know about hire purchase.
Where can I find the best hire purchase car finance deals?
If you're financing your next car with hire purchase, you'll want to know where to find the best deals. Most drivers start online, where you can find anything car finance related. Here, you can get more information about the types of hire purchase finance agreements available, and see which lenders offer the best deals by looking at comparison websites.
You may also consider using a broker who can find a deal based on your requirements. Other options include going directly to the dealership, or asking friends and family to see if they used hire purchase to buy their car.
Find out more about where to find the best hire purchase car finance deals now.
How to secure the best hire purchase deal for your next car
Using hire purchase can be a smart way to finance your next car, but how can you ensure you get the best deal available? For starters, think about the deposit amount you're willing to pay – the higher the deposit, the lower the overall borrowed amount. Beyond that, you might consider getting a used car, as they are cheaper than brand new models and can save on the amount you need to borrow.
Don't forget to check your credit score, too. A high score means you have access to favourable interest rates and are more likely to pay less each month. Other options include doing a part-exchange, so you don't pay as much for the new car and checking APRs of hire purchase deals to estimate the true cost of the loan.
Check out our useful blog on how to get the best hire purchase deals for your next car now.
Do I need to pay a deposit on a hire purchase deal?
Financing your car through hire purchase means you can get a vehicle without paying the full price upfront. You'll also usually need a deposit, which acts as a down payment. Typically speaking, deposits for hire purchase deals tend to be between 5% and 10% of the car's value. So if you bought a car worth £25,000, your deposit would be £2,500. A higher deposit means you will borrow less as you're covering more of the car's value upfront.
Discover more about hire purchase deal deposits in our blog.
Do hire purchase car loans have a balloon payment?
When you buy a car with personal contract purchase (PCP), you have the option of buying the car at the end by paying something called a balloon payment. You pay an agreed monthly amount for the duration of the contract with a lump sum at the end to become the full owner of the car. Balloon options usually reduce the monthly payment. With a hire purchase agreement, however, there is usually no balloon payment. Instead, it works more like a mortgage: you pay a deposit and then make the monthly payments on the car until it's paid in full. But there are exceptions.
Find out more about hire purchase balloon payments now.
Can you claim back VAT on a hire purchase deal?
When you buy a car, you're paying for both the price and the VAT, which is the value-added tax added on products and services. It's always included in the overall price, so you don't need to do any extra maths when making calculations. But some drivers wonder if it's possible to claim the VAT back. The answer? Possibly. To reclaim VAT on a brand new car, you have to be a VAT registered business and eligible to reclaim VAT on the new vehicle in your tax return. Of course, that means you would need to run a VAT-registered business, and the car would essentially need to be a business expense. But there are other circumstances, such as cars adapted for use by disabled drivers.
Check out our blog to learn more about claiming VAT on a hire purchase deal.
Get the Best HP Car Deals with Carmoola
At Carmoola, we provide some of the best hire purchase car finance deals. With our fully online and convenient car finance, you can get your budget and pay for your new car in a matter of minutes! Check out how it works, or learn more about our car finance options now. 😊🚗