Is Hire Purchase Financing a Good Idea on Used Cars?
How to Find the Best Used Car HP Deals
What Is Hire Purchase?
Hire Purchase (HP) is a form of car finance consisting of monthly payments with fixed interest rates. After the final payment has been made, you become the vehicle's legal owner.
Suitable for both personal and business use, HP has proven to be an affordable option for those interested in purchasing a car without the upfront expense. HP contracts don't have a mileage limit, giving this financing deal an advantage over other alternatives.
How do HP Car Finance deals work?
The Hire Purchase agreement is usually made with the car dealership directly. Once the agreement is signed, a deposit is then placed, typically around 10% of the vehicle’s value, although some deals are available at 0% deposit.
After the deposit has been made, monthly instalments are then paid for the duration of the contract at a fixed rate. With APR as low as 6.9% (depending on credit score), we proudly offer the best HP deals available on used cars.
It is worth mentioning that the higher the deposit, the lower the fixed monthly cost of the deal will be. In addition to that, shorter length contracts are also a more cost-effective option as there is less interest payable across the duration of the agreement.
At the end of the contract, there is no lump sum to pay, and you become the outright owner of the car, provided all services have been paid for.
HP Finance Deals on Used Cars
It’s important to note that HP deals are also available on used cars, making them even more affordable. As payments are split monthly across the term, a Hire Purchase deal allows you to conveniently budget your car payments, and get the car you want, when you want it. Nevertheless, it is important to stay on top of these monthly payments, or you could lose the right to that vehicle.
A shorter contract may be a better option if you are looking to pay a smaller amount overall but with higher monthly rates. Alternatively, if you prefer lower monthly payments, a longer contract may be the right choice for you. If you decide to pay over a 60-month period, you could pay less than £100 a month! However, bear in mind you’ll end up paying a bigger amount overall.
At DCC, our Hire Purchase agreements are available with a range of durations, from 12 to 60 months. This ensures that no matter what you are looking for, we can provide you with the right deal to meet your needs.
Browse our stock to find the used cars available in our local dealerships in:
We pride ourselves in our wide range of HP deals so finding something that’s suitable for your lifestyle and income has never been easier. Don’t hesitate to contact us for any additional information you may need, and we’ll get back to you as soon as possible.
What to look for in HP Deals on Used Cars
It’s important to consider what makes a good HP deal, so you can ensure you are getting the best value out of your budget.
Annual Percentage Rate (APR)
An important point to look out for are the APR you will be paying across the duration of the agreement, as well as the total amount repayable. It’s worth investing in a shorter length HP deal if you are looking to save more money as this is more cost efficient. All our car listings clearly display the relevant cost information, and our friendly teams are always more than happy to help you to understand your options.
Mileage Limit
In some cases, HP deals can include a mileage limit that restricts how many miles you can drive within a year. This is a red flag as it will ultimately limit your capacity to use the vehicle as you want. At DCC, all our Hire Purchase agreements have no limit on the mileage which gives you complete freedom with how you use your car.
Warranty
When buying a used car, always check the warranty and what is covered within the contract or services offered by the car dealer. Depending on the age of the car, you might get different lengths of warranty and different breakdown coverage. An older car is more likely to break down or need repairs so being covered could make a big difference for your future finances!
We care about giving you high quality services to protect your vehicle and have generously included 6 months of warranty and free 12 months of AA breakdown coverage on all vehicles. Getting you back on the road and providing great customer support is our priority at DCC.
What are my other options to buy a used car on financing?
If you think that HP deals are not the right fit for you, there are other popular options such as Personal Contract Purchase (PCP). This is more convenient if you are looking for a greater range of options at the end of the deal, where you can exchange your car, buy it outright or return it.
The main difference between HP and PCP financing is the amount you pay per month. PCP is suitable for those looking to pay smaller sums per month, however, there will be a lump sum at the end of the agreement if you wish to legally own the car. Additionally, if you are looking to upgrade your car at the end of the deal, then PCP can remain much more cost efficient per month. A PCP deal might not be ideal if you wish to avoid an annual mileage limit.
Whatever deal you’re looking for, whether it’s Hire Purchase or Personal Contract Purchase in Southampton, Fareham, or Waterlooville, at Driving Cleaner Cars, we have a range of deals to suit you now, and in the future. Why not get in touch with our helpful support team today to talk about getting you behind the wheel of your next quality used car. Call us at 0330 019 0863 or submit an enquiry form here.