1. Personal Finance
  2. Personal Hire Purchase
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Hire Purchase (HP)

Hire Purchase is a way to hire the car from the finance company with fixed monthly payments, to spread the purchase price of a car across a longer period. Once all the payments have been made and the finance agreement ends, the car is yours.

Find out more about the features and risks of Hire Purchase finance below and browse our handy frequently asked questions.

  • Key features of Hire Purchase

    • With contracts up to 60 months long, you can spread the costs to suit you.
    • The car is yours to own at the end of the agreement.
    • There are no mileage restrictions, so you decide how far you drive the car.
    • You choose how much deposit you put down at the start of the agreement

  • Risks of Hire Purchase

    • Once the agreement comes to an end the car is yours, so any depreciation risk is yours.
    • You do not own the car until the final payment is made.
    • If you fail to make the payments set out in your agreement, your car could be repossessed, and your credit rating may be adversely affected

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How Hire Purchase (HP) works

Hire Purchase allows you to purchase a car without having to pay the full amount upfront. Instead, you pay a monthly fee to hire the car, which covers the cost of the car as well as interest charges. Ownership of the car is not transferred to you until you’ve made the final payment and paid the option to purchase fee. We’ve split the process into three stages below to give a clear explanation of Hire Purchase.

1. Deposit

  • The deposit is the amount you pay upfront at the start of the agreement, and it will determine how much you need to borrow.
  • The deposit ranges from 0 to 95% of the car price, and some Toyota cars come with a deposit contribution which you can put towards the car.
  • The larger your deposit, the less you’ll have to borrow and the smaller your monthly payments will be.

2. Monthly Payments

  • Your monthly payments will be fixed throughout your agreement, and they are affected by the size of your deposit. Once you’ve chosen the length (term) of your agreement, the amount will be spread equally across the months.
  • To help you manage your monthly payments, you are invited to join My Finance, a convenient way to manage your finance agreement online.

3. End of Contract

  • Once you’ve made your final monthly payment, the car is yours to keep.
  • If you get to the end of your agreement, and have made all payments, then decide you don’t want to keep the car anymore, you can part exchange it for a new car.

 

Unsure about any finance terminology? Take a look at our finance glossary.

Hire Purchase Frequently Asked Questions

Take a look at our frequently asked questions on getting a car on finance with HP.

0 to 95%.

Choose a term from 24 to 60 months*

 

*Maximum terms vary according to car model.

No.

No.

Yes.

No.

Yes.

Your finance agreement will state that the car must be maintained in line with the manufacturer’s guidelines.

Once all payments under your finance agreement are made, ownership automatically passes to you, so any depreciation risk is yours.

You can own the car.

No.

Yes. Ownership passes once all the monthly payments have been paid, or if you settle all applicable payments earlier.

If you decide to part exchange, you will need to settle your finance agreement, you can do this at any time. For regulated finance agreements, an early settlement amount is calculated in accordance with the Consumer Credit (Early Settlement) Regulations 2004.

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