Hire purchase (HP) is a way to finance a car using fixed monthly payments over an agreed term. If you keep up payments, you own the car at the end of the agreement. If you have bad credit, hire purchase car finance with bad credit could still be an option.
If you make payments on time and they are reported, it may help improve your credit record over time. This depends on your situation and how lenders report. Late or missed payments may affect your credit record, and the car could be repossessed if you do not keep up repayments.
Go Car Credit is a direct lender, not a broker. If you take out a hire purchase car finance agreement with us, our team can support you from application to completion. Read on to learn what hire purchase is, how it works, and whether it could be right for you, even with a bad credit rating.
Representative example – Total amount of credit £10,500, annual interest rate 18.25% (fixed), charge for credit £9,886.25 (£9,581.25 interest, £295 admin fee and £10 option to purchase fee), total amount payable £20,386.25. Loan term of 60 monthly instalments, 59 payments of £339.60 and 1 final instalment of £349.60. 34.5% Representative APR – Subject to status and affordability.
Hire purchase (often called HP) is a type of car finance where you pay for the car in fixed monthly instalments over an agreed term. Hire purchase is also known as an HP agreement.
You might pay a deposit first. Then you make monthly payments until the agreement ends. Your payments usually cover the cost of the car plus interest and any fees. The lender owns the car until you make the final payment.
With Go Car Credit, we set out the key costs up front, so you can see what you’ll pay before you sign. HP does not usually include mileage limits. We do not use balloon payments. Hire purchase could be a practical way to spread the cost of a car.
Getting a personal loan for a car can be harder if you have bad credit. That does not mean you have no options. Hire purchase (HP) is one way to finance a car if you have a poor credit history or you do not want to pay cash.
Hire purchase car finance is secured on the car. This means if you do not keep up repayments, the lender may repossess the car and you could lose the vehicle.
Because the finance is secured, some people find HP is available when other credit is not. So even if you’ve already been turned down for a normal loan, you can still apply for hire purchase car finance with bad credit with Go Car Credit. Any offer we make, including the rate, is subject to status and affordability.
Hire purchase (HP) could be a practical choice if you want fixed payments and you want to own the car at the end of the agreement. Here are some of the main advantages.
Hire purchase (HP) can work well for some people, but it is not right for everyone. Here are a few things to consider before you apply.
They can be. If you have bad credit, you may be offered a higher interest rate, which can increase your monthly payments. The rate and terms you’re offered depend on several factors, including your credit history, the car you choose, the loan amount, the length of the agreement, and the size of any deposit.
We review each application on its own merits and carry out checks, including an affordability assessment. We check your income and outgoings as part of this process. You can also use our bad credit car finance calculator to get a rough idea of what your repayments could be.
Alongside the tips in our resources section, you may be able to improve your credit score before you apply by:
Not always. In some cases you can apply for hire purchase with no deposit. If we do ask for a deposit, it is usually because the car costs more than the amount you can borrow.
For example, if your maximum loan amount is £7,000 and the car’s asking price is £7,200, you would need to pay a £200 deposit.
You might have seen adverts for no credit check car finance or an instant decision. We do not offer that.
As a responsible lender, we carry out checks and look at every application on its own. Any offer we make depends on your status and whether the finance is affordable for you.
We keep the process simple:
If you have bad credit, getting car finance through a high-street bank may not always be easy. At Go Car Credit, we review applications individually and aim to make the process clear and supportive. Here are six reasons people may choose us:
We could provide hire purchase car finance for bad credit across the UK through a network of trusted dealers. If you’d like to talk it through, call us on 01925 696 373 and we’ll answer your questions.
Applying for car finance may feel stressful, especially if you’ve had credit problems in the past. We aim to keep the process clear and simple.
You can start by entering a few details in our secure online application form. We’ll review your application and give you a decision. If you want to go ahead, we’ll ask for details of the car you want and then you can sign your agreement online.
There’s no obligation to proceed if you decide it’s not right for you.
