Recruiting Now! Click to see our latest vacancies.
View all locations
big motoring world logo×
01634 248638

HP Car Finance

Learn more about HP car finance, so you can decide if it's right for you.
Why choose HP?
Here's some of the reasons PCP may be right for you
No mileage restrictions
Own the car at the end of the agreement
Flexible loan terms
Low deposits
Spread the cost
What is HP finance?

With a Hire Purchase (HP) finance agreement, you’ll put down an initial deposit when taking out your agreement and you will make regular instalments over an agreed fixed period, much like a regular loan. HP finance agreements are secured against the car and you’ll therefore own the vehicle once your final payment is made. If your aim is full vehicle ownership at the end of your agreement, then HP finance is usually the more cost effective way for you to achieve this.

With a HP finance agreement, you’ll be able to spread the cost of vehicle ownership over a fixed term of up to 5 years. If you don’t have the full funds to buy a used car right now, HP is great for allowing you to make smaller payments over a period of time that works for you. Unlike PCP finance agreements, HP finance does not have any balloon payments or mileage limits, making the overall finance product easier to manage and understand.

Hire purchase is also sometimes known as ‘conditional sale’. Learn more about HP finance below.

Why we love HP
If the idea of a balloon payment and mileage limits doesn't sound right for you,
then HP FInance may be the best options for you.
No mileage limits
Life is unpredictable, so estimating your annual mileage can prove to be a troublesome job. Luckily for you, with a HP finance agreement, there’s no need to watch the mileage clock as your HP agreement doesn’t need to make any assumptions and predictions about the condition of your car at the end of your agreement. Likewise, you won’t need to worry about incurring any additional charges that can sometimes be encountered with PCP agreements, if mileage limits are exceeded.
No balloon payments
All monthly payments that will need to be made under a HP agreement will be set out from the beginning. When the agreement ends, you’ll fully own the car. There’s no need to worry about any further payment further down the road, such as balloon payments, which come with PCP finance deals. From the outset, you’ll be paying off the total vehicle cost. Start your car search with Big Motoring World today.
How does HP finance work?
We’ll give you an example of how a HP finance deal works. Assume you’ve found a car at Big Motoring World that’s perfect for you, but you cannot afford the full vehicle cost, so you’d like to look into ways of spreading the cost. The car you love is worth £20,000 and you only have a 10% deposit of £2,000 available to put down. If you’re looking to own the car as quickly as possible, you may decide to opt for a shorter agreement, but you’ll need to pay higher monthly payments to cover the full cost, whilst benefiting from less interest as the agreement will be repaid sooner. Likewise, if you’re looking to make things more comfortable monthly with your outgoings, you may decide to extend the term to make the monthly payments smaller, however your overall interest charges will be larger as the term of your loan increases. With HP, you have flexibility with both the deposit and the term of your loan so you can find the sweet spot in terms of affordability and the overall cost for the credit. To get real world figures for how your monthly payments could look, use our online finance calculator tool.
Can I settle a HP finance agreement early?
Put simply, yes. Should your circumstances change, you can decide both to repay the loan in full early or part exchange the car to get a newer vehicle. In both examples, you’ll need to speak with your finance company to generate a settlement figure. This figure will acknowledge the balance due, what’s been paid to date and the adjusted interest that would be due based on the current point in time.
Is HP right for me?
HP finance is great if vehicle ownership is important to you, but you do not have the full funds to afford the car you want. If however you’d prefer to have the option of returning the car to your finance lender and if you’re regularly changing your cars, a PCP finance agreement may suit you better.
What documents do I need to bring with me to finance a car?
You’ll need to bring a number of documents with you to apply for finance. This includes your driving licence, a passport (as a secondary form of ID), a recent bank statement (issued within the last 3 months), a recent utility bill (issued within the last 3 months) and your bank details (including your name, account number and sort code).
Live Chat