Understanding HP Car Finance

What Is HP Car Finance All About?

Hire Purchase, commonly known as HP, is a car finance option that makes owning a car more manageable by spreading the costs. The loan you take out is tied to the car itself. So, while you’re making repayments, think of it as a long-term rental. But don’t worry, once you clear the final payment and pay a small ‘Option to Purchase’ fee, the car is all yours to do as you please.

How Does It Compare?

Compared to other finance options like Personal Contract Purchase (PCP), HP usually means higher monthly payments. But on the flip side, you’re not usually limited by mileage, and you get full ownership once you’ve paid it off.

The Nitty-Gritty: Monthly Payments

Your monthly payments will vary based on:

  • How much you initially pay as a deposit
  • The duration of your loan term
  • The interest rate applied
  • The model of the car you choose

How Does HP Actually Work?

Once you pass a credit check, an HP agreement covers the car’s cost minus your deposit. You repay this loan in fixed monthly instalments, plus interest. These agreements can last from one to five years. At the end, you pay the ‘Option to Purchase’ fee and voila, the car is yours.

Bad Credit? No Problem!

Worried about a less-than-stellar credit score? Oasis Motor Finance works with multiple lenders to help even those with a poor credit history. While your monthly payments might be a bit higher, consistent repayments could boost your credit score over time.

Pros and Cons: Is HP Right for You?

Advantages
  • Full ownership after all payments
  • No mileage restrictions
  • No large ‘balloon’ payment
  • Flexible loan terms from 1 to 5 years
Disadvantages
  • Higher monthly payments compared to other options
  • Can’t sell or modify the car until it’s fully yours
  • Ownership only after the full repayment
  • No guaranteed future car value like with PCP

Is HP Your Best Bet?

If you’re after full ownership, planning to keep the car for a good while, or have a lifestyle that involves a lot of driving, HP could be a solid choice for you. Want to dive deeper? Check out our comprehensive guide on our blog.

Representative Example Of Credit (Hire Purchase)
Hire Purchase (HP) Finance Example: Cash Price £12,480.00 Total Deposit £1,140.00. Total Amount of Credit £11,340.00. 60 monthly repayments of £284.50. Interest Charges of £5,730.00 Total Amount Payable £18,309.00. Annual Fixed Interest Rate of 11.1%. Representative APR 18.9%.

Need to Talk?

If you'd like to talk to one of our customer care team please call us 0161 850 5000.

You can also WhatsApp or email us using the links below.

To request a call back at a time convenient to yourself, please use the form below remembering to leave a short message so we can direct your enquiry to the correct team.

Footer

Latest from our blog

Oasis Motor Finance Limited is a company registered in England and Wales with company number 10055340. Oasis Motor Finance is regulated by the Financial Conduct Authority with Financial Services reference number 757830.

Important Information

Status Disclosure Statement

Terms and Conditions

Privacy Policy & Cookie Notice

Complaints Procedure

Mandate

Resources

Blog

Dealer Terms & Conditions

Contact

Oasis Motor Finance Limited

Trident Park, Trident Way, Blackburn, Lancashire BB1 3NU

Oasis Motor Finance Limited is a credit broker and a lender.
We look to find the best rate from our panel of lenders, which we are part of and will offer you the best deal that you're eligible for. We don't charge a fee for our service, but we do earn a commission. This does not influence the interest rate you're offered in any way.

Applicants must be 18 years or over. We are only able to offer finance products from our providers.

Oasis Motor Finance Limited are registered with the Information Commissions Office under registration number: ZA196536.