Hire Purchase

When you first decide to buy a car on hire purchase, you will have to place down a deposit on the vehicle. This is usually around 10% of the total price. At Carbase, we allow you to set your own deposit so, whatever you're able to contribute is taken off the total value of your chosen vehicle.

Hire purchase is normally offered by a car dealer, such as Carbase, with the competitive car loan rates being provided by a finance company based on your credit score and/or personal circumstances. The loan that you take out on the car, which you pay back over a set time frame, is secured against the car. This means that you will not own the car outright until you have paid the last instalment of your loan.

It's important to make sure you budget for these loan monthly repayments, since you don't want to stretch your monthly budget. Also, should you miss repayments of your hire purchase loan, it can ultimately result in the loss of your car.

Your hire purchase agreement will set out the period of time you have for repayments, and the amount of monthly instalments that you will need to pay back, with interest, every month. With us, your agreed time period can be anything from 1 to 5 years.

If you're looking to buy a car but have bad credit, purchasing a car on HP car finance can be an accessible option. While Hire Purchase repayments are often more expensive than those of another finance options, such as car leasing, the benefits of buying a car on Hire Purchase mean that you will eventually own the car and, if you make your repayments in a timely manner, you can work to improve your credit score.

If you're looking to improve your credit score before buying a car on Hire Purchase, or another finance option, why not take a look at our blog on the subject?

If you're not able to afford to buy a car in one big purchase, Hire Purchase can help fit the costs of buying a car around a monthly spending budget. With flexible repayment terms, you'll be able to pay as much as you can afford.

Of course, longer repayment terms will result in higher interest paid overall. However, even with a longer repayment term, the interest rates on your Hire Purchase agreement will be the same, so you'll know exactly how much you need to pay every month without any surprises.

When it comes to paying a deposit at the start of the process, as we mentioned above, it will most likely be quite low. Additionally, in some cases, once you've paid half the cost of your car, you may be able to return it and not have to make any more payments.

As we mentioned before, until you make your final payment, you don't own the vehicle. The deposit you put down, and the term length you choose, will also affect these payments. If you have a short term on the loan and your deposit is smaller, your loan repayments will often be higher than if you have a longer term and pay more of a deposit.

Until you have paid a third of the total amount of the vehicle, the lender is able to repossess the car without needing to get a court order.

Don't forget, HP is not your only option when it comes to owning a car. PCP finance may suit you better, find out more about it here.

No matter your credit history, you can compare finance deals from a panel of lenders using your credit rating. Carry out a Free Car Finance Check, which uses a quotation search to show your likelihood of acceptance without affecting your credit rating. It is quick and easy to apply online once you have found your ideal car.