Main image for post: Is HP car finance right for you?

If you’ve been shopping for car finance, you might be wondering if HP is right for you. No, we’re not talking brown sauce – we’re talking Hire Purchase (HP) finance packages.

Buying a car through hire purchase is a popular option. It’s straightforward and it’s flexible, letting buyers choose their dream car and spread monthly payments to suit their particular budget. It’s reassuring, because the payments will always be the same each month – making it easy to calculate if you can really afford that new set of wheels.

So how does it work? With HP finance, buyers pay a deposit when the loan is arranged. This is usually 10% of the value of the car, but can be negotiated with the lender. The value of the loan is secured against the car, so you don’t actually own it until you make your final payment.

With HP, you’re effectively HIRING the car for the term of the loan, until you can PURCHASE it at the end.

Because of this, HP car finance is generally easier to qualify for – much easier than a personal loan. So, if your credit rating isn’t perfect, it could be a suitable option. If you keep up with your monthly payments, a HP deal will actually help your credit score. But if you fail to pay, you’ll be marked as ‘in default’ and if you really fall behind, your car could be repossessed.

As with all car finance, when arranging a HP deal it’s important to consider the interest. Yes, it’s tempting to stretch out the term of the loan for as long as possible and watch your monthly payments fall, but you’ll be paying more interest in the long run.

Keep an eye on the APR – the annual percentage rate – the lower this is, the better. And remember, the bigger the deposit a buyer puts down, the more likely it is that that buyer will qualify for 0% finance. It might sting at the time, but the bigger the deposit, the lower the price of the car overall.

How to work out if HP car finance is for you

When it comes to buying a car on finance, there are so many options. The best way to work out what’s right for you is to write a list of pros and cons; that way, you can see which deals really meet your needs.

We’ve done the legwork for HP loans for you:


  • It’s simple – easy to arrange and get your head around
  • It’s very flexible – you can stretch your term from 1-5 years to control your monthly payments
  • It’s generally much easier to qualify for HP rather than a standard, unsecured loan – especially for those with a slightly shaky credit rating
  • If you’ve got a bit of spare cash for a chunky deposit, you could qualify for 0% finance
  • Once you’ve made your final payment, the car is all yours!


  • Monthly payments for HP are, on average, a little higher than other deals such as PCP
  • Until you’ve made the final payment, you don’t own the car
  • Interest rates can be higher than standard loans
  • If you fail to make payments, the lender may take the car away

Financing a car doesn’t have to be complicated – hire purchase proves that. If you’ve got any more questions about car finance, call cartime today on 0161 825 8467 and one of our team can help.

If you’ve decided on HP and you’re ready to shop for a car, browse online or head down to our showroom – it’s home to over 400 prestige makes and models. That hot little Hyundai you’ve been hankering for? It could be all yours with the help of a handy HP finance deal. Don’t forget our amazing 5-month payment-holiday deal – that’s right, buy now and pay absolutely nothing for 5 whole months!