Contact us

Hire Purchase, or Personal Motor Loan, is a great way to spread the payments of your new car, rather than splitting between monthly payments and large balloon payments.

At the end of a Hire Purchase agreement, you will completely own the vehicle, subject to a transfer of ownership fee (if applicable).

Terms and conditions apply, but people tend to go for this option when a PCP/PCH is not suitable for the vehicle, or if they want to ensure ownership at the end of the agreement.

How does Hire Purchase Work?

Hire Purchase (HP) agreements are a more traditional type of finance package. Unlike Personal Contract Purchase (PCP) deals, where you only pay off the car's depreciation, an HP agreement involves paying a deposit followed by monthly repayments (with interest) that cover the total value of the car over the course of the contract. HP contracts typically last from one to five years.

You won’t own the car until you make a 'transfer fee' or 'option fee' payment at the end of the agreement. It's important to note that you cannot sell the vehicle without the lender's permission until this final payment is made, although this fee is often relatively low.

What are the advantages of Hire Purchase?

  • Full ownership at the end of the agreement
  • Early repayment opportunities
  • No large balloon payments
  • You aren't limited by mileage as with other finance types

What are the disadvantages of Hire Purchase?

  • The initial deposit and monthly payments are generally higher than those of a comparable PCP deal.
  • This option might not be ideal if you don't intend to keep the car at the end of the finance term.
  • The interest paid on the vehicle may be higher than with a PCP deal.

Is Hire Purchase right for me?

A hire purchase agreement could be the right finance option for your if:

  • You want to keep your car at the end of the finance agreement
  • You don’t want to be bound by mileage restrictions
  • You’d prefer to spread the full cost of a car evenly without a large final fee

What other finance options do I have?

If you don't think a Hire Purchase is the right finance choice for you, there are other options available, including:

  • Personal Contract Purchase (PCP)
  • Leasing/Personal Contract Hire (PCH)
  • Personal Loan
  • Cash

Hire Purchase Finance FAQs

A Hire Purchase finance agreement is calculated by deducting the deposit amount from the total price of the vehicle, plus interest at your agreed rate, with the remaining balance divided into monthly payments and a small final fee.

You can pay to end your Hire Purchase agreement early. Your provider will offer a settlement fee, which is a lump sum calculated from any unpaid instalments and interest. If you wish to terminate your agreement and hand the car back, you can do so under voluntary termination.

Voluntary termination under a Hire Purchase (HP) agreement is a legal right that allows you to end your contract early. Under the Consumer Credit Act 1974, you have the option to return the car to the finance company, provided certain conditions are met. Here’s how it works:

  1. Minimum Payment Requirement: You can voluntarily terminate the agreement once you have paid at least 50% of the total amount payable under the contract. This includes the deposit, monthly payments, and any fees.

  2. Returning the Car: You must return the car in good condition, accounting for normal wear and tear. If the vehicle is damaged beyond this, you may be liable for additional charges.

  3. Outstanding Balance: If you haven’t paid 50% of the total amount, you can still terminate the agreement, but you will need to pay the difference to reach that 50% threshold.

Voluntary termination is a useful option if your circumstances change and you can no longer afford the payments, or if you simply wish to end the agreement early. It allows you to return the car without facing severe financial penalties, provided you follow the outlined conditions.

With a Hire Purchase Agreement, you can't transfer the agreement into a different car, as you can with a PCP agreement. You can change your car once you have fully paid your HP finance, or if you pay the settlement figure to end the agreement early. 
Chippenham Motors
Contact us
Live chat
Call us

© 2026 Chippenham Motor Company Limited, Automotive website provided by Bluesky Interactive Ltd

Chippenham Motor Company Ltd is an Appointed Representative of Automotive Compliance Ltd, who is authorised and regulated by the Financial Conduct Authority (FCA No 497010). Automotive Compliance Ltd's permissions as a Principal Firm allows Chippenham Motor Company Ltd and MRG to act as a credit broker, not as a lender, for the introduction to a limited number of lenders and to act as an agent on behalf of the insurer for insurance distribution activities only.

We are a credit broker and not a lender. We can introduce you to a carefully selected panel of lenders, which includes manufacturer lenders linked directly to the franchises that we represent. We act on behalf of the lender for this introduction and not as your agent. We are not impartial, and we are not an independent financial advisor.

Our approach is to introduce you first to the manufacturer lender linked directly to the particular franchise you are purchasing your vehicle from, who are usually able to offer the best available package for you, taking into account both interest rates and other contributions. If they are unable to make you an offer of finance, we then seek to introduce you to whichever of the other lenders on our panel is able to make the next most suitable offer of finance for you. Our aim is to secure a suitable finance agreement for you that enables you to achieve your financial objectives. If you purchase a vehicle, in the majority of cases, we will receive a commission from your lender for introducing you to them which is either a fixed fee, or a fixed percentage of the amount that you borrow. This may be linked to the vehicle model you purchase.

Different lenders pay different commissions for such introductions, and manufacturer lenders linked directly to the franchises that we represent may also provide preferential rates to us for the funding of our vehicle stock and also provide financial support for our training and marketing. But any such amounts they and other lenders pay us will not affect the amounts you pay under your finance agreement; however, you will be contributing towards the commission paid to us with the interest collected on your repayments. Before we propose you to a potential lender, we will inform you of the likely amount of commission we will receive and seek your consent to receive this commission. The exact amount of commission that we will receive will be confirmed prior to you signing your finance agreement.

All finance applications are subject to status, terms and conditions apply, UK residents only, 18s or over. Guarantees may be required.

Chippenham Motor Company Ltd is an Appointed Representative of Automotive Compliance Ltd, who is authorised and regulated by the Financial Conduct Authority (FCA No 497010). Automotive Compliance Ltd's permissions as a Principal Firm allows Chippenham Motor Company Ltd and MRG to act as a credit broker, not as a lender, for the introduction to a limited number of lenders and to act as an agent on behalf of the insurer for insurance distribution activities only.

We are a credit broker and not a lender. We can introduce you to a carefully selected panel of lenders, which includes manufacturer lenders linked directly to the franchises that we represent. We act on behalf of the lender for this introduction and not as your agent. We are not impartial, and we are not an independent financial advisor.

Our approach is to introduce you first to the manufacturer lender linked directly to the particular franchise you are purchasing your vehicle from, who are usually able to offer the best available package for you, taking into account both interest rates and other contributions. If they are unable to make you an offer of finance, we then seek to introduce you to whichever of the other lenders on our panel is able to make the next most suitable offer of finance for you. Our aim is to secure a suitable finance agreement for you that enables you to achieve your financial objectives. If you purchase a vehicle, in the majority of cases, we will receive a commission from your lender for introducing you to them which is either a fixed fee, or a fixed percentage of the amount that you borrow. This may be linked to the vehicle model you purchase.

Different lenders pay different commissions for such introductions, and manufacturer lenders linked directly to the franchises that we represent may also provide preferential rates to us for the funding of our vehicle stock and also provide financial support for our training and marketing. But any such amounts they and other lenders pay us will not affect the amounts you pay under your finance agreement; however, you will be contributing towards the commission paid to us with the interest collected on your repayments. Before we propose you to a potential lender, we will inform you of the likely amount of commission we will receive and seek your consent to receive this commission. The exact amount of commission that we will receive will be confirmed prior to you signing your finance agreement.

All finance applications are subject to status, terms and conditions apply, UK residents only, 18s or over. Guarantees may be required.
Call us
View Used View New
New Buy Live Chat Book Service Menu