What is HP Finance? | Hire Purchase Finance

Hire Purchase (HP) finance enables buyers to spread the cost of a vehicle over the course of a number of months, typically between 12 and 60. For the duration of a HP contract, the vehicle will be the property of the finance lender and the borrower will effectively be hiring it until the total cost is paid.

How Does HP Finance Work?

If you enter into an HP finance agreement, you will pay an initial deposit, followed by regular monthly repayments, until the total cost of the car has been covered. HP plans have a fixed rate of interest, so you will pay the same amount each month until your contract term is up.

The good thing about HP finance agreements is that they can be shaped to suit your budget. There are three variables: the size of the deposit, the duration of the contract and the monthly payments, which can be altered. Once you have established your monthly budget, you can find the right combination using Hilton Garage’s handy online finance calculator.

What Happens at the End of a HP Finance Agreement?

Until your HP contract ends, the car will officially belong to your finance provider, but once you have made all of the monthly repayments, you will become the legal owner of the vehicle. At this point, it is your choice whether you would like to keep it or sell it on.

How to Initiate an HP Car Finance Agreement

If you are interested in buying a car using HP finance, the first thing to do is to work out how much you will be able to afford monthly. You can then search for your perfect car based on this amount here. Once you have found a great vehicle at a price you can afford, you can apply for finance online and even reserve your chosen car.