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Hire Purchase (HP) finance

Looking for Hire Purchase finance for your new ride? Find a finance agreement that works for you.

Takes 60 seconds, no impact on your credit profile to see if you're approved 👍 

Representative 14.8% APR

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What is Hire Purchase?

Hire Purchase is a car finance plan that helps you to spread the cost of your next car by making monthly payments over an agreed length of time. You’re likely to pay higher monthly payments than you would with other car finance options, but when you come to the end of the HP agreement you’ll own the car outright.

How does Hire Purchase work?

A Hire Purchase agreement provides you with a loan to cover the cost of your next car. You might have to pay a deposit, but this is variable depending on the lender's specific criteria. 
Carmoola is a lender who provides Hire Purchase agreements with no deposit.

  • Choose your deposit.

You can use cash, trade in your old car, or mix both. More money upfront means smaller monthly payments.

  • Lock in your schedule.

Confirm how much you can borrow and agree on fixed monthly payments and a loan term that works for you.

  • No final balloon payment.

Unlike some options, there's no big sum due at the end. Just an ‘Option to Purchase’ of £1 which covers the transfer of ownership. Once you make all your regular payments (and any extra fees), the car is yours!

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The key features of Hire Purchase are:

  • Fixed contract length, usually between 2 and 5 years
  • Even monthly repayments for the duration of your loan
  • Start your loan with, or without an upfront deposit
  • Own the car outright, once all the repayments have been made

Is HP the right choice for me?

A Hire Purchase agreement might be right for you if you’d like to buy the vehicle at the end of your loan agreement and can manage the higher monthly payments.

Benefits

  • No annual mileage limits: You can drive as much as you like without mileage restrictions.

  • Tailored payments: Choose a repayment term that works for you between 1 and 5 years, though be aware of increased interest for longer terms.

  • Low upfront cost: Start with a low or no deposit, making it easier to get started.

  • Predictable payments: Lock in a fixed interest rate for the entire term, giving you complete control over your monthly expenses.

  • Accessible option: Even with a not-so-perfect credit score, hire purchase can be easier to secure than unsecured loans thanks to the car acting as collateral.

  • Own the car outright: You become the car's owner once you complete all payments

Worth noting

  • Not your wheels yet: The car isn't truly yours until the final payment has been made. 

  • Modifications on hold: No customisation or selling until you own it outright. 

  • Paying a bit more: Compared to PCP and leasing, your monthly payments will most likely be slightly higher.

  • Early repossession risk: Before a third of the car is paid, repossession without court order is a possibility.

What details do I need to apply for a Hire Purchase agreement?


All you need is our app and a full driving licence, in order to apply for a Hire Purchase agreement with Carmoola. Firstly, we'll need to run a soft credit search.


For this, you'll need to answer a few questions such as your name, current address, date of birth and some information about your regular income and expenditure. You'll also need a full driving licence, and later in the journey you'll need to provide the details of the car you'd like to buy. We'll even run a free history check for you on the car!

What happens at the end of my Hire Purchase agreement?

At the finish line of your Hire Purchase agreement, you take the keys to full ownership. Settle any final fees, pay £1 for a transfer of ownership to be processed and the car is all yours.

Answer a couple of questions to find out if you might be eligible to buy your car with Carmoola!

Eligibility

See if you’re likely to be approved for a budget 🤞

  • Aged between 18 - 75
  • Live in the UK
  • Have a full driving licence
  • Buying a second hand car
  • Borrowing between £2K - £40k

How it works

Out with the old. Drive in with the new.

Step 1

Set your loan amount

In just 60 seconds, see how much you can borrow towards your next car

Step 2

Buy your dream car

Pay swiftly online with your card, or by bank transfer at the showroom

Step 3

Hit the road and pay monthly

Take full control of your account in the Carmoola app

No dealership commissions, no middlemen. Just you, and us 🥰

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5 ⭐️ support

Got a question? Our friendly, UK-based team is here from 8am - 9pm EVERY day, via WhatsApp, email, SMS or phone.

Simon

“Such a simple way to get car finance and at a good rate too. Easy to use app with step by step process. Love the finance calculator, which allows you to adjust the amounts and see the payments instantly. Would definitely recommend!”

Simon

Simon.

Dean

“Easy to use and to get a budget with their online calculator! The best part is the flexibility, you can choose how much within your allocated budget and for how long to repay. Will defo use again in the future. *****”

Dean

Dean

Joanne

“Absolutely amazing service, super quick to respond and it couldn’t have been easier, I would 100% recommend Carmoola to anyone!”

Joanne

Joanne

Burrow

“Not just a normal car Finance company!! Very fast and efficient and they make you feel like a valued family member, lots of unexpected after sales benefits that have been very much welcomed and appreciated too!!”

Burrow

Burrow

Richard

“Incredible experience! Omg! The way forward in car finance. I’d use these guys again and thoroughly recommend them. 🚘”

Richard

Richard

 

New to HP finance?
Check out our guides

Hire Purchase vs Leasing: Which is Better?

If you’re in the market for car finance, you’ll probably have heard about Hire Purchase – or HP for short – and leasing. They’re two of the most...

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HP vs PCP: Which is right for me?

HP vs PCP is the big debate in car finance. They’re two of the most popular ways to spread the cost of buying a new or used car and have many...

7 Min Read

What is Hire Purchase (HP) finance?

Considering financing a car with a Hire Purchase (HP) agreement? Check out our guide to all things HP to help you decide whether it’s the right...

8 Min Read

FAQs About Hire Purchase

Here are the most frequently asked questions about how Hire Purchase works. Got more questions? Head over to our FAQs page 👍

How to apply for Hire Purchase finance?

To apply for a loan with Carmoola, simply download our app and answer a few questions. You can also head over to our Hire Purchase calculator to see how much you can afford.

What is the difference between Hire Purchase and a loan?

A Hire Purchase agreement is a secured loan against the specific car you're buying, whereas a loan from your bank can be for anything. There are also certain protections and rights you'll receive under a Hire Purchase agreement, that you may not get from a regular loan.

What is the difference between Hire Purchase (HP) and Personal Contract Purchase (PCP) finance?

HP is all about ownership. Put down a deposit, spread the remaining cost over fixed monthly payments, and voila – the car is yours once you have completed your payments.

PCP, on the other hand, provides a different option. You pay off just a portion of the car's initial value, keeping your monthly payments lower. At the end, you have options: pay off the remaining "balloon payment" to own the car, return it and walk away, or trade it in for a new one. It's like renting with a potential to buy later.

Want to find out more about HP vs PCP? Why not read our guide to get to grips with the pros and cons of each car finance option.

Can I sell a Hire Purchase car?

Yes, however you'll need to pay off your Hire Purchase agreement in full first. If you're thinking of selling the car, request an Early Settlement Quote first, so you know how much you'll need to pay to settle the agreement. The finance company will have an interest registered against the car, so until you pay off the Early Settlement Quote in full, they are still the legal owner of the vehicle and you're not permitted to sell it.

What if I can’t afford my Hire Purchase payments?

If you're struggling to pay, you should get in touch with the finance company as soon as possible. Give them information about how your current situation has changed, and they will be able to help you with the next steps. Sometimes, these situations can be worrying, but don't bury your head in the sand. It's best to communicate with the finance company as soon as you can. 

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Takes 60 seconds, no impact on your credit profile to see 
if you're approved 👍

Rates from as low as 6.9% APR, Representative 14.8% APR

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