HP car finance - hire purchase

Hire purchase is a form of financing which allows you to buy goods or services and pay for them in instalments, over a set period of time. This type of finance is popular in the UK, as it provides individuals with greater flexibility when it comes to purchasing items that may normally be beyond their financial reach. 

The interest rate charged on hire purchases varies depending on the lender and other factors, although it tends to be higher than rates applied to other forms of borrowing.

Once all payments have been made and the balance has been settled, ownership of the goods or service will transfer from the lender who provided it on hire purchase terms, to the customer (you!).

When applying for HP car finance in the UK, you will need to provide several documents in order to be considered. These documents may include:

• Proof of your identity (such as a valid passport or driving licence)
• Address history
• Marital status
• Employment status and history
• Income & evidence of your salary slips/bank statements
• Amount you wish to borrow

It is important to provide this information accurately in order to give yourself the best chance of being successful with your application. 

Your credit score may also be taken into consideration when applying for HP car finance, so it is important to check that your credit report is up-to-date and does not have any negative ratings against it.

Anyone looking to take out HP car finance in the United Kingdom must satisfy all relevant criteria before they qualify. This includes having a steady source of income, being over 18 years old, and having a minimum of three years’ address history in the UK.

Rates and terms can vary depending on an individual’s financial circumstances but making a larger deposit is one way to reduce the amount owing each month or overall cost of the loan.

It is possible to get HP finance with bad credit in the UK? There are lenders that specialise in bad credit HP finance, who will consider customers even if they have a history of adverse credit on their record. 

The key thing to bear in mind when looking for bad credit HP finance is that the terms and conditions associated with an agreement are likely to be less favourable than those offered to people with good or excellent credit ratings. The interest rate applied is usually higher than standard and customers with bad credit may also find that they have a smaller amount available to borrow.

If you are still within the loan term, you cannot sell your hire purchase car. You can only sell it once all payments have been made and the vehicle is rightly yours. If you wish to sell it sooner than that, you might be able to request an early settlement with your lender.

In most cases, you can terminate your agreement, providing you haven’t been issued with a default notice. Once terminated, you will have to give the car back and will not get any of your money back.If you can’t afford your HP car payments but wish to keep the car, you might be able to refinance the car. This involves taking out a new finance agreement, usually with a longer repayment period.

The main difference between HP and PCP finance is what happens at the end of your agreement. With HP finance, you pay off the full cost of the car and then own it outright. With PCP finance, you can walk away and get a different car at the end. If you wish to keep the car, you’ll have to pay a balloon payment.