Hire Purchase car finance
Hire Purchase (HP) is one of the simplest ways to spread the cost of your next car — and our guide breaks it down step by step. Learn how HP works and see if it’s the right fit for you.
Our rates start from 11.9% APR, the rate you are offered will be based upon your individual circumstances.
Borrowing £8,700 over 5 years with a representative APR of 24.3% an annual interest rate of 21.9% (fixed) and a deposit of £0.00, the amount payable would be £239.88 per month, with a total cost of credit of £5,692.80 and a total amount payable of £14,392.80.
Luv Cars is a broker, not a lender.
Lender fees may apply, this is an example only.
What is hire purchase car finance?
Hire Purchase (HP) is a simple, straightforward way to spread the cost of your next car. Instead of paying the full amount upfront, you’ll make monthly payments until everything’s covered.
Because the agreement is secured against the car, you’re essentially “hiring” it while you pay off the loan. But once you’ve made your final instalment – plus a small Option to Purchase fee if required – the car becomes completely yours. Keep it, sell it, or enjoy it for years to come!
Monthly payments are usually higher with HP than with finance options like PCP, but the big bonus is that you won’t have mileage limits or end-of-term surprises. And at the end of your agreement, the car is all yours.
You may need to put down a deposit (though £0 deposit options are available), followed by fixed monthly payments over an agreed term.
Your monthly cost will depend on:
- Your deposit
- The length of your agreement
- The interest rate
- The car you choose
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How does HP finance work?
A Hire Purchase agreement covers the cost of your new or used car (minus any deposit you choose to pay). You’ll repay the remaining balance through manageable monthly payments, plus interest. Most HP agreements last between two and five years, and once you’ve reached the end and paid any final Option to Purchase fee, the car is officially yours.
To get started with HP, you’ll need approval in principle. Even if you’ve had credit challenges before, you may still be able to get approved—lenders will simply check your credit history and affordability.
Can you get Hire Purchase with bad credit?
Yes, you may be able to get HP finance even with bad credit. In fact, HP can be one of the more accessible options if your credit history isn’t perfect. Lenders will run checks to make sure the repayments are affordable, and your monthly payments may be higher than with other finance types, but you’ll own the car at the end.
Making your payments on time could even help improve your credit score over time.
At Luv Cars, we work with a panel of lenders who consider a wide range of credit backgrounds, including those with poor or limited credit history. All finance is subject to status.
What are the advantages and disadvantages of HP?
Hire Purchase can make it easier to spread the cost of your next car, but it’s not always the perfect match for everyone. Here’s a quick look at the key pros and cons to help you decide if HP suits you:
| Advantages of Hire Purchase: | Disadvantages of Hire Purchase: |
| You’ll own the car once all repayments (and any small Option to Purchase fee) are complete | Monthly payments can be higher than with other finance types |
| No mileage restrictions — drive as far as you like | You can’t sell or modify the car without approval |
| There’s No large final “balloon” payment at the end, unlike PCP | You won’t fully own the car until every payment has been made |
| Agreements typically run from 2 to 5 years, giving you flexibility | There’s no guaranteed future value like you get with PCP |
Is HP the right option for me?
Always double-check the details in your agreement, but HP could be a great choice if you:
Want to own the car outright at the end
Plan to keep your car for several years
Don’t want to worry about mileage limits
Prefer steady, fixed monthly repayments
Why LuvCars for HP car finance?
A helping hand
At Luv Cars, we’re all about making car finance feel simple and stress-free. We believe everyone deserves a smooth, feel-good car-buying journey. With access to a wide panel of lenders, we’ll use our experience to help find a deal that works for you — because when it comes to car finance, we go the extra mile.
Your own dedicated account manager
You’ll have a friendly, dedicated account manager by your side throughout the process, so you’ll never feel lost or unsure.
Finding you the best deal
Whether you’re after a roomy family car, something stylish for the commute, or just a reliable ride for every day, we’ll work to find you the best deal from our lender panel — even if your credit score isn’t perfect.
Here’s how to get your finance
In 3 simple steps
1. Get approved
Get your personalised car finance quote and approval in principle in minutes using our smart search tool.
2. Choose your car
Once approved, find your car by using LuvCar finder. Showing you 1000’s of options from our approved dealers.
3. Drive away & luv it
We’ll sort everything out. You just turn up and drive away.
Why customers Luv us
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Frequently asked questions
Do I own the car with HP?
Yes — once you’ve made all your monthly payments (and the small Option to Purchase fee, if required), the car becomes yours.
Will I have mileage limits with HP?
No. Unlike PCP, HP doesn’t have mileage restrictions, so you can drive as much as you like.
Can I pay off my HP agreement early?
Yes, you can request a settlement figure at any time and choose to repay the balance early.
Is HP more expensive than PCP?
HP usually has higher monthly payments because you're paying off the full value of the car — but it can be cheaper overall if long-term ownership is your goal.
Is the loan secured?
Yes — HP is secured against the car, meaning the lender owns the vehicle until all payments are made.
Can I modify or sell the car during my HP agreement?
You’ll need the lender’s permission before making major modifications or selling the car, since they legally own it until the agreement ends.