Who does Hire Purchase suit?
As hire purchase (or HP) is secured on the car youre far more likely to get credit than a personal loan. So, if youre worried about being refused finance on the high street, HP could be the best route. Hire purchase is the simplest form of car finance. You effectively rent the car while making regular monthly payments, but every time you hand over the cash it contributes to the vehicle eventually becoming your property. Hire purchase through a car dealer is arranged in a very similar way to buying any other goods on credit while all the calculations, form-filling and signatures are carried out in the dealership, its a finance company who supplies the cash, and to whom you make your repayments to. The monthly repayment is worked out by adding an interest rate to the cost of the car, and then subtracting any deposit you pay up front. You might also want to trade in your current car; its value will help reduce those payments even further. Hire purchase appeals to many for its simplicity a
