Hire Purchase is possibly one of the easiest finance options to understand. You effectively hire a vehicle from a finance company for an agreed period of time.

As such a Hire Purchase agreement is one of the most common methods of paying for your new vehicle, typically lasting 2-3 years but it can stretch to 5 years to meet your needs.

You come to an agreement with the finance company about your initial payment (unless predefined by the finance company), your monthly payments and the term of the policy. At the end of the agreement (assuming everything has been paid under the agreement) then the title to the vehicle is transferred over to and you become the legal owner.  

As the lender is keeping the ownership of the vehicle until the end of the agreement this gives them more security in the event of payment problems. The lender can also offer you more attractive terms and conditions because they keep ownership of the vehicle until you make your final payment.


  • Once you make your final payment you own the vehicle
  • Convenient straightforward application process
  • Fixed repayments and interest rates
  • Additional protection over a personal loan
  • Payments and term to meet your budget
  • Keeps existing credit lines free
  • There is no need to estimate the mileage at the outset
  • Rebate of future interest if you settle your agreement early
  • Additional customer protection with regards to the satisfactory quality of your vehicle


  • The loan is secured against the vehicle, therefore if you miss payments on the loan the vehicle may be repossessed

Hire Purchase for Premium Brands

Hire Purchase is a straightforward route to owning a premium vehicle like a BMW. This is a great way to spread the cost of your vehicle over a fixed term while still owning the vehicle at the end of the contract. 

Example costs for buying a vehicle through Hire Purchase

Example costs for buying a vehicle through Personal Contract Purchase. These examples are based on CarMoney rates as of August 2023. 

Representative example:

  • Borrow: £7000
  • Deposit: £1000
  • APR: 17.9% 
  • Term (months): 48
  • Total Amount Payable: £8247.83
  • Monthly payments: £171.83

Need another type of finance?

Find out more about PCP

We compare the best deals from over 20 lenders

  • BNP Paribas
  • Alphera
  • Blue Motor Finance

Let's cut to the car chase

  • 1. About the loan

    Got a particular kind of car in mind? If so, how much would you like to borrow? And for how long?

  • 2. About you

    We'd like to know a little more about you. Nothing too personal, though. Any horrors in your music collection can remain your little secret.

  • 3. About ready

    By doing some extensive detective work at incredible speed, we'll soon hunt out the best and cheapest lenders for you.