Hire Purchase (HP) is a type of car finance that allows you to spread the cost of buying a car over a set period of time. Here are some key points about HP car finance:

• You pay a deposit, followed by fixed monthly instalments until the end of the agreement.
• The length of the agreement can be between 1 to 7 years.
• At the end of the agreement, after paying a one-off final fee, you will own the car outright.
• You don’t own the car until you’ve made your final payment, which means if you get into financial difficulties, the finance company could take it away.
• You can’t sell or modify the car over the contract term without getting permission first.
• Monthly payments are usually higher than for Personal Contract Payment (PCP) and leasing deals.
• HP is useful if you want to purchase a car outright and spread the cost of a vehicle over a set amount of monthly payments.
• HP is available on new and used cars.
• HP has fixed interest rates and monthly repayments.
• HP could help people with a poorer credit score to buy a car as the finance is secured against the vehicle, unlike an unsecured personal loan.
• HP doesn’t usually come with mileage restrictions, unlike PCP or a lease.
• If you miss any payments, the lender could repossess your car.

To apply for HP car finance, you need to find the car you want, confirm how much you will need to borrow, pay an initial deposit, pay off the rest of the value of the car in instalments plus interest, and pay a one-off final fee before you own the car outright. You can normally get HP finance through your car dealership, but it’s useful to compare options with online brokers before going to the dealership so you know you’re getting a good deal[[4]](https://www.experian.co.uk/consumer...