What is Hire Purchase (HP) and how does it work?

If you’re new to car finance, you might be looking at ways to purchase a car without the lump sum. Hire purchase (HP) is a great way to finance a vehicle. 

But what is it exactly?

At Concept Car Credit, we’re here to explain everything you need to know, so you can decide if it’s the right option for you. 

What is hire purchase (HP)?

Hire purchase – also referred to as HP – is a car finance agreement that lets you spread the cost of a car over a set period. It includes monthly payments, and after the final instalment is paid, you own the car.

Ownership is automatically transferred to you once all payments are made, making HP a simple way to eventually own the vehicle outright without needing to pay the full amount upfront. It’s a popular option for those who want clear budgeting, fixed payments, and a path to ownership at the end of their agreement.

How does hire purchase work?

1. Choose your car

Head to the Concept Car Credit and choose your favourite make, model, and engine type. You can test drive as many as you want, with the help of our team to recommend cars that match your needs and standards. 

2. Agree on a contract length 

HP agreements usually last between 1 and 5 years, depending on your budget. Our team are experts in the game, so we’ll explain every detail of the agreement to make sure you know exactly what to expect before you sign.

3. Make monthly payments 

Every month, you’ll be required to pay the agreed amount for the duration of the contract. 

But we don’t like to do things the old-fashioned way. If you’re ever struggling, just let us know and we’ll adjust your payments to the lowest possible amount. You never have to worry about missed or late payments with us. 

4. Ownership transfer 

Once the agreement has come to an end and you’ve made all the required payments, the ownership of the car will be automatically transferred to you. 

Benefits of hire purchase 

• Fixed monthly payments for simple budgeting
• Automatic ownership once all payments are made
• Accessible for people with different credit backgrounds and credit scores 
• Flexible contract length and deposit 

Is hire purchase right for me?

When looking into HP agreements, it’s important to make the following considerations: 

• Ending the contract may result in extra fees, so the total fee is paid off
• Insurance and maintenance costs are your responsibility while you’re making the payments 
• Affordability and hard credit checks will be completed, which will be marked on your account 
• While we do offer competitive interest rates, this will be added to the monthly payments, increasing the cost higher than the original cost of the car

How Concept Car Credit can help 

We like to make things as simple as possible here at Concept Car Credit. 

Our team is here to guide you through every step, even if you’ve had credit issues or been denied credit types in the past. 

All you need to do is fill out an online application to get started, or contact us to learn more.