Hire Purchase (HP)

Combine leasing with eventual car ownership through Hire Purchase (HP). This spreads out the cost of a vehicle into more manageable monthly instalments. HP is also known for being one of the simplest and most straightforward types of car finance.

How does Hire Purchase work?

Agree a deposit amount, mileage limit and length of term with your finance provider. The typical deposit is ten percent of the car's value, and HP plans usually last for between 12 and 60 months. Both the initial payment and the term length will have an impact on the monthly payment amount.

Repayments are fixed, so you can anticipate them and manage your budget accordingly.

During the agreement, you do not have the right to sell or alter the vehicle. You are essentially hiring it for the length of the term. It does not belong to you until all payments have been made.

Benefits of Hire Purchase

A straightforward and easily understandable type of financing, Hire Purchase packages are ideal for buyers confident that (a) they wish to own their car at the end of the agreement and for some time afterwards, and (b) that their personal and financial circumstances are unlikely to change in the near future, allowing them to keep up with the fixed repayments. Deposit levels also tend to be low.

What do I do at the end?

An 'Option To Purchase' fee is payable if you want to own the vehicle. It is only at this point that you are considered the legal owner. This gives you the freedom to do as you wish with the car.

It is often possible to return the car after at least half of the repayments have been made. This is an option if you decide you would like to use another make and model instead.

Can I settle a HP agreement early?

On Hire Purchase, you are likely to be able to make early repayments. This could make HP a more attractive option than other types of car finance. The complete amount owed will still need to be paid, even if you settle earlier than expected.

Get in touch

A wide range of new cars and competitive Hire Purchase agreements can be selected from all Johnsons Cars dealerships. In the south of England, the West Midlands and Merseyside, we are your local, trusted dealer for new and Approved Used vehicles.

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