With Hire Purchase, you choose the car and Zuto arranges for the payment of the vehicle. You then hire the car from the finance company, taking responsibility for it and making monthly payments until you have paid the total amount owed. You are the registered keeper of the vehicle throughout the payment plan and then at the end of the repayment period, you have the option to take ownership of the car. As you’ve paid off the cost of the car by this point, all you pay is a small admin fee. This could be anything from £1 to a £299+.
HP key details: Hire Purchase agreements offer fixed monthly repayments over an agreed period with you and the lender, typically between 12-60 months. If you are in a position to pay a deposit upfront, you can reduce your monthly repayments over the course of the finance term. You don’t have to offer a deposit but it can increase your chances of a better deal or approval with the lender. A deposit should ideally be 10% of the total cost of the vehicle however, even a smaller sum may open up more lending options to you.
To find out if HP is suitable for you go to our Car Finance Explained guide.
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