Hire purchase (HP): The ideal financing for your car

Hire Purchase, or simply HP, is a type of financing used in the United Kingdom for the purchase of durable consumer goods, such as cars, appliances and furniture. Also known as “purchase with retention of title”, this financing model allows the buyer to use the asset immediately, while paying monthly installments over a specified period.

Explaining the fees

When opting for Hire Purchase, it’s important to consider the associated fees. Usually, financing includes a fixed interest rate over the contracted period. This rate may vary according to the value of the good and the duration of the contract. Additionally, some financial institutions may charge an administration fee or other fees related to the process.

Explaining what happens after funding

After full payment of the installments established in the Hire Purchase contract, the buyer becomes full owner of the asset. This means that the reservation of ownership is withdrawn, and the asset becomes legally in your possession. In some cases, depending on the agreement, there may be an option to purchase the asset in advance, upon payment of a residual amount.

Explaining the features

Hire Purchase has some specific characteristics. One of them is the way financing is structured, divided into fixed monthly installments, which facilitates financial planning. In addition, the buyer has the advantage of using the good immediately, even before completing the full payment. This financing modality is also accessible for people with unfavorable credit history, as many financial institutions offer HP options even for those with low credit scores.

Explaining the pros and cons

Like any form of financing, Hire Purchase has advantages and disadvantages to consider. Among the positive points are the possibility of acquiring a good without having to pay the full amount at once, the flexibility of payment terms and the opportunity to improve your credit score by keeping your installments up to date. On the other hand, it is important to emphasize that the asset still belongs to the financial institution until all installments are paid, which may limit the freedom to sell or modify the asset before full settlement.

Explaining the duration of Hire Purchase contracts

Hire Purchase contracts can vary in terms of duration, generally ranging from 12 to 60 months, depending on the value of the financed asset and the buyer’s ability to pay. It is essential to carefully analyze the payment period to ensure that the installments fit the monthly budget, avoiding financial problems in the future.

Top Banks and Finance Companies offering the Hire Purchase option in the UK

There are numerous bank and finance options offering Hire Purchase to consumers in the UK. Among the numerous options, we highlight a few here in this article.

Barclays Bank

Barclays Bank is one of the leading financial institutions offering the Hire Purchase service in the UK. With a wide range of financial products, including finance for cars, appliances and other durables, Barclays offers flexible payment options and competitive rates. Customers can contact their bank for more information on specific conditions and requirements.

Santander UK

Santander UK is another renowned bank that offers Hire Purchase as part of its financial services. With a solid reputation in the market, Santander offers financing options with fixed installments and competitive rates. The financial institution provides customer support and expert guidance to help buyers choose the best payment plan according to their needs and financial capacity.

Close Brothers Motor Finance

Close Brothers Motor Finance is a finance company specializing in vehicle finance and is recognized in the Hire Purchase market in the United Kingdom. The company offers customized financing options tailored to individual buyers’ needs. In addition, they work closely with a wide network of car dealers, making the purchase process easier for customers.

Black Horse Finance

Black Horse Finance is a specialized Hire Purchase finance company, operating in the UK market for many years. They offer a variety of financing options for vehicles, furniture and other durables. With a solid reputation and national presence, Black Horse Finance provides a reliable and transparent service with competitive rates and flexible terms.


Moneybarn is a finance company specializing in Hire Purchase for customers with unfavorable credit history. They understand the difficulties faced by people with low credit scores and offer financing solutions tailored to these circumstances. The company works with a variety of durable goods such as cars, motorcycles and equipment, providing an opportunity to purchase these items through Hire Purchase.

It is important to highlight that there are several other financial institutions in the United Kingdom that also offer the Hire Purchase service. Interested buyers should research and compare the available offers, taking into account the rates, conditions, requirements and reputation of the companies, in order to find the option that best suits their financial needs and individual preferences.