If you choose to buy a vehicle under a Hire Purchase (HP) Agreement, you enter a contract where you would pay for the vehicle in parts. This is calculated by the value of the vehicle along with the interest added and divided into pre-determined amounts. It is different from a traditional loan, this is because you do not own the vehicle until the loan has been paid off. The debt is secured against the vehicle, this means when you are not allowed to sell it until the debt has been cleared.
You are borrowing money for the vehicle and the loan is secured against it. When you have paid all the finance owed, the car is yours. HP car finance would be a suitable option for you when you know you’ll be keeping the vehicle for a while.
Low deposit – keeps valuable personal cash available
Control – you decide the deposit, you decide the term
Fixed monthly payment – makes budgeting simple
Flexibility – doesn’t compromise your other lines of credit
Assets – you gain ownership of the car