Hire Purchase is a traditional finance agreement that allows you to make an initial payment (similar to a deposit) followed by fixed repayments over one to five years. At the end of the contract, you will own the vehicle.
✓ Usually no mileage restrictions
✓ HP leads to ownership and is suited to customers who intend to keep their vehicle for longer than the period of repayments
✓ Monthly payments are fixed
✓ Deposits can be as little as the monthly payment
✓ You can choose the most appropriate term to suit your budget
✓ Borrowing secured against the car
✓ You can settle the balance any time
✓ Interest rates are fixed
Hire Purchase is most comparable to a bank loan and enables you to repay the balance on a flexible term with no mileage restrictions. At the end of the agreement you own the vehicle but may need to pay the 'option to purchase fee' depending on the manufacturer.
You may terminate a HP agreement earlier than the full term, however you will have an amount to pay back which is dependant on how far you are into the contract.