HP car finance calculator

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Amount to borrow:
To repay over:
5 Years
Car finance rate XX% APR
Cost of credit £ XXX
Total repayment £ XX,XX.XX
48 monthly payments of
£ 245 /mo

Representative example - Borrowing £5,500 over 4 years with a representative APR of 19.8%, and a deposit of £0, the amount payable would be £162 per month, with a total cost of credit of £2,282 and a total amount payable of £7,782.

How HP car finance works


Find a deal

Submit your details and choose from a fantastic range of car finance deals.


Final arrangements

If successful we’ll organise everything with the lender.


Enjoy your new car

All that’s left to do is to enjoy your new car for the duration of your contract.

What is a hire purchase agreement

A hire purchase (HP) is one of the easiest ways to purchase a vehicle on finance. It opens up the opportunity to spread the cost of buying a new or used car with fixed monthly instalments.

Hire purchase combines elements of both loan and lease, with several benefits. Initially, you pay a low deposit for your desired car, typically around 10%. The balance is then paid off in monthly instalments over an agreed period of time. At the end of this period, you are the legal owner of the car with no fees, final instalments or ‘balloon payments’ to pay off. It’s also worth noting that if your financial situation improves you can settle your hire purchase agreement early.

Unlike PCP agreements, the residual value of the car isn’t taken into account at the end and monthly instalments are based on the retail value of the vehicle at the time of your hire purchase application, the length of contract and the size of the deposit — paying a larger deposit initially, will decrease the monthly repayment figure.

When you apply for this option you will need to provide the details of your chosen car and of your approved dealer. The money will then be transferred to the dealership and you’ll receive the deeds to the car when you collect it.

Personal car loans vary from £2,000 to £50,000 over 12 to 60 month terms and you will normally have to pay an initial deposit of 10%. However, it’s important to note that the HP company will legally own the car until you have made the final repayment. This means that you won’t be able to sell your car until the end of the agreement.

If you opt for a hire purchase car loan then you’ll probably be able to afford a more expensive car but you are also more likely to see higher monthly repayments.

An example of how HP agreement works

Your instalment plan will vary depending on a number of factors but as an example, let’s say that you’ve paid your initial deposit and would like to borrow £10,000 over a 48-month period. With 5.9% APR, monthly payments would be £234, which means the total you pay back would be £11,196. If you were to stretch that over a longer period such as 60 months, monthly payments would drop to £191, with £1,502 credit payable in total. This benefits many of our customers and gives them the flexibility to choose a plan that suits their pocket.

Hire Purchase advantages

  • You become the legal owner after the last instalment has been made
  • The interest rate remains fixed throughout the duration of the contract and there’s no VAT to pay
  • Businesses can also often benefit because rather than losing a large lump sum, they can easily manage their cash flow by spreading the costs over an agreed period of time
  • You can still use and drive the car even though its value hasn’t been paid in full
  • Unlike leasing, you don’t have to worry about the value of the car decreasing
  • There’s no balloon payment at the end of the instalment period

Does applying for HP car finance affect my credit score?

As with any loan, we will need to complete a credit check of your financial history, which ultimately has an effect on your credit score. Each time you apply for a loan, even if you choose not to pursue it, is recorded on your credit history. If you’ve ever been refused a loan, this is also noted. This is important because the more credit refusals you have against your name, the more negative your overall credit score will be.

When you apply with us we do a soft credit check first. This won't affect your credit score rating.

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