What is Hire Purchase?
At Caledonia Vehicle Solutions, hire purchase (HP) is just one type of car finance that we offer our customers to help make the cost of a vehicle more manageable.
HP finance is an excellent option for those who want to drive away in a car but don’t want to pay the upfront cost all at once. This blog post explains exactly what it is and how it works.
What is HP Finance?
With hire purchase finance, you will pay an initial deposit, followed by a number of monthly instalments to cover the cost of the car you wish to own. After making all of the regular payments, there will be an ‘option to purchase fee’. Until you have paid this, the vehicle will officially belong to the finance company, so you are essentially hiring it, and can choose to purchase it at the end of the agreement.
How Does HP Finance Work?
HP finance is probably the most straightforward type of car finance agreement. You will be asked to make a deposit, a fraction of the price of the car you are looking to buy, and this amount will be subtracted from the vehicle’s value to reveal how much you will borrow. The amount you are borrowing will be divided by the number of months you will be making repayments for to give you the cost of each instalment.
At Caledonia Vehicle Solutions, we offer tailored HP finance, so we will work with you to find a deposit amount, term length and monthly repayments that suit your circumstances. You can use our online finance calculator to adjust these variables and get instant quotes.
What Happens at the End of an HP Finance Contract?
Once you have reached the end of your HP finance agreement period and have made all of the monthly repayments, you will pay the ‘option to purchase fee’ and ownership of the car will be transferred from the finance lender to you.
To find out more about hire purchase finance, get in touch with Caledonia Vehicle Solutions today and speak to one of our experts, or apply for car finance online!