What is Hire Purchase Car Finance (HP)?
HP stands for Hire Purchase and has two elements of a lease and a loan. HP is most common form of car finance in the Industry.
How Does HP work?
When you find a vehicle that you want to buy at Trade Price Cars whether it be a vehicle we have in stock or one we are sourcing for you we would discuss your finance options with you. Hire Purchase can be taken out with a Zero Deposit if required however we typically recommend 5 - 10% as an upfront payment.
Once you have paid the deposit on collection of the vehicle the balance is then paid off over a pre agreed finance term in regular monthly instalments. Typically 12 - 60 months.
During the time that you are making the repayments to the finance lender you are effectively â€hiringâ€ the vehicle.
Once you come to the end of the hire purchase term and the final repayment has been made the vehicle then belongs to you â€œpurchaseâ€. Most hire purchase car finance agreements may also have a small admin fee or otherwise referred to as an option to purchase fee at the end of agreement.
Can I sell my car whilst on Hire Purchase?
Typically, because you don't own the car outright until you finish all re-payments and the option to purchase fee (as it belongs to the finance company) you are unable to sell your car privately.
However, you can part exchange your vehicle with Connect Cars and take out a fresh finance agreement on an alternative vehicle. We will request a car finance settlement from you which you are able to obtain from your current lender. Our next step would be to value your vehicle against the new car you are looking at and work out a suitable deal for you.
Why Consider Hire Purchase?
- Low Deposits - Use your personal savings for other things, or leverage your money for business.
- You decide the finance term typically from 12 - 60months.
- A fixed interest affordable monthly payment.
- Attractive rates, typically lower then personal loans.
- Available for those who have had trouble obtaining loans may still be accepted for a Hire Purchase agreement subject to affordability checks.