What are the pros and cons of car Hire Purchase?
Pros
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Repayment terms are often flexible
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Relatively low deposit payments are required
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The interest rate is fixed
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You might be able to return the car part-way through the repayment period
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There's no final lump sum to pay at the end of the agreement
Cons
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The car isn't yours until you’ve made the final payment
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If you can’t meet payments, the finance company could take your car away
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The size of your deposit and length of your repayment term will affect your monthly payments
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You may be limited to buying your car from a particular manufacturer or dealership
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Shorter-term deals can be relatively costly
What our car finance expert says
HP car finance can make owning a vehicle a reality without having to pay out a lump sum. HP will usually come with no mileage restrictions compared to other finance options like PCP, but monthly payments will usually be higher.
So if you're keen on not being limited on the miles you drive and don't mind paying slightly more each month, it could be a better finance option for you.
Matthew Harwood
Car finance expert
Need more help?
Will I be charged a fee for organising car finance?
Can I change my car on HP?
There are two ways of changing your car when you’re on HP:
End the HP agreement early by paying the owed balance with one lump sum payment. You’ll have to ask your HP car finance provider for an early settlement figure to do this. You’re then free to sell the car.
Trade in the car at a dealership. The dealer would pay the early settlement figure for you to end your current HP car finance agreement. If the trade-in value offered by the dealer is lower than the early settlement figure, you’ll need to pay the difference.
Can I pay off my hire purchase deal early?
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