There are numerous different finance plans that we offer for our vehicles here at Rix Motors. One of the more popular plans amongst our customers is the Hire Purchase (HP) option. It sounds self-explanatory, but there is a little more to a HP than what initially meets the eye, which we will now discuss in more detail.
What is hire purchase?
As the name suggests, a Hire Purchase means that you are hiring the vehicle over the course of a long-term plan, which can range from one year to five years. This means that you do not own the vehicle at any point prior to making your final payment. Of course, at that point, the car belongs to you for as long as you wish to keep it, but up until that point, it is an extended borrow agreement that puts the vehicle in your possession. Therefore, in simple terms, the loan is secured against the car, which is why you can’t own it until you’ve made your last payment.
However, by opting for the Hire Purchase, you are making a big financial saving. After all, because you do not own the car and are merely hiring it, the responsibility of the vehicle still lies with the dealer, which reduces insurance costs. This not only means that you are paying less per month, but it also potentially opens the door for a greater number of car opportunities, since the motor that seems out of your price range is suddenly entirely feasible to purchase via a HP agreement. What’s more, the deposit will not be quite as high as it would be under a different finance plan, though the exact amount will impact what you pay per month and vice versa.
How to get the best hire purchase deal
By understanding your finance options first, you can shop for a car with a budget in mind.
There are two main hire purchase options:
A Hire Purchase is particularly good if you are the sort of driver that switches vehicles every few years. If you know that you want to buy a particular car, but you tend to change cars after a while, then it is hardly worth spending a life-changing amount of money for a vehicle that won’t be yours for more than two or three years. A Hire Purchase, however, means that you are essentially encouraged to move onto another vehicle, and if for some reason you had to exit the agreement early, it is easier to do so than it would be for, say, a Personal Contract Purchase (PCP). It provides the security of having a new car without having the pressure of feeling like you need to keep the vehicle forever.
These are a couple of reasons why a Hire Purchase is recommended for drivers, but you can request for more information about out cars on finance deals here.
To view our most attractive hire finance offers on some of the most sort after car brands, visit the links below: