How Car Hire Purchase Works
Hire purchase is the simplest way to finance a car you want to keep. You pay a deposit, then fixed monthly payments over an agreed term, usually 1 to 5 years. Once the final payment and any small option fee are paid, the car is yours. There’s no mileage limit and no large final payment unless you choose one. Boost Finance compares HP lenders for the exact car you want, new or used.
Car HP in three steps
Step 01
Choose your car
From a franchised dealer, an independent or, with some lenders, a private seller.
Step 02
Pay a deposit
Cash, a part-exchange or both. A bigger deposit lowers your monthly payments.
Step 03
Fixed monthly payments
Pay the same amount each month. Once everything is paid, the car is yours.
Is HP right for you?
Why choose hire purchase
- You own it at the end: no balloon or return conditions
- No mileage limits: drive as much as you need
- Fixed payments: the same each month for the whole term
- New or used: including older and prestige cars
Monthly payments are usually higher than PCP or lease purchase, because you repay the full amount rather than deferring part of it.
HP, PCP and lease purchase compared
| Hire purchase | PCP | Lease purchase | |
|---|---|---|---|
| Monthly payments | Highest, as you repay the full amount | Lower, as part of the cost is deferred | Lower, with a balloon at the end |
| Final payment | None, or a small option fee | Optional final payment (GFV) | Balloon payment, which you must settle |
| At the end | You own the car | Keep, return or part-exchange | Pay, refinance or sell to settle the balloon |
| Mileage limits | No | Yes, with excess mileage charges | Usually not, depending on the lender |
| Best for | Owning outright | Changing car every few years | High-value cars that hold their value |
Features vary by lender and agreement. We’ll explain the terms of any agreement before you sign.
Things to know
The lender owns the car until you finish
You can’t sell the car without settling the finance first.
Voluntary termination
On a regulated agreement you can hand the car back once you’ve paid half the total amount payable, subject to its condition.
Missed payments
Missing payments can affect your credit rating, and the car can be repossessed.
Other ways to finance your car
PCP
Lower monthly payments, with the choice to keep, return or part-exchange at the end.
PCP car finance →
Lease purchase
Lower payments with a final balloon, popular for high-value and appreciating cars.
Lease purchase →
Car equity release
Release cash from a car you already own, or refinance your current agreement.
Equity release →
Why drivers use Boost
Specialist lenders
We work with lenders who understand prestige, performance and older cars that mainstream lenders can be cautious about.
Any dealer, new or used
Franchised dealers, specialist independents and, with some lenders, private sellers. We deal with the seller for you.
Clear figures, fast
Deposit, monthly payment and any final payment set out clearly, with one point of contact from first call to collection.
Finance is subject to status and available to UK residents aged 18 and over. Boost Finance is a credit broker, not a lender.
Car Hire Purchase FAQs
What’s the difference between HP and PCP?
With HP you repay the whole cost of the car and own it at the end. With PCP, part of the cost is deferred to an optional final payment, so monthly payments are lower, but you need to pay it to keep the car.
How much deposit do I need for car HP?
It depends on the car, the lender and your circumstances. Many agreements use a deposit of around 10%, and a part-exchange can count towards it.
Can I settle my HP agreement early?
Yes. You can ask the lender for a settlement figure at any time, and early settlement usually reduces the interest you pay.
Can I get HP on a used or older car?
Yes. Many lenders fund used cars, and specialist lenders fund older, prestige and classic cars.
Is there a mileage limit on HP?
No. Unlike PCP, hire purchase has no mileage limit because you’re buying the car outright.
Are you a lender?
No. Boost Finance is a credit broker, not a lender. Boost Asset Finance Ltd is an Appointed Representative of EFT Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 667290). We work with a panel of lenders to find the right finance for you.
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