What is Hire Purchase?

In most situations, you first need to put down a deposit on the van or car you want to buy. This is usually the full vat on a van or 10% on a car or more of the vehicle’s value if you wish to or its specified by the lender.

The rest of the value of the van or car will then be paid off in instalments over a period of 12 to 60 months (one to five years).

Hire purchase is arranged by the van or car dealer, but brokers also offer this service. The rates are often very competitive for new vehicles, but less so for used vehicles. For second hand vehicles the annual percentage rate can vary from 4% – 8%. The lower the number the better. The rate could be higher for example because you don’t have a good credit score.

The loan is secured against the vehicle, which is why you can’t own it until you’ve made your last payment, including paying the Option to Purchase fee.

Make sure you understand the terms and conditions of your loan before signing the contract. For example, once all repayments have been made you pay a final fee, known as the ‘Option to Purchase’, once you’ve paid this you’ll own the vehicle. This is typically £100-£200, but it does vary so ask how much it will be.

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Hire Purchase with a balloon

Hire Purchase with a balloon payment is very similar to a standard Hire Purchase agreement , but like a PCP a certain amount of the loan is deferred until the end as a final “balloon” payment. The balloon amount is fixed, but unlike a PCP there is no Guaranteed Minimum Future Value and the final payment has to be settled at the end of the agreement if you want to take ownership of the vehicle. The alternatives are part exchanging or refinancing the vehicle.

A Hire Purchase with Balloon agreement will offer lower monthly payments than an equivalent HP agreement without a balloon. The balloon amount can also be higher on popular manufacturers models with better residual values helping payments be cheaper! This can help a customer with a certain monthly budget afford a new or better quality vehicle for there desired monthly payment.

Agreements are available from 24-60 months.

HP (Hire Purchase) agreements are based on a fixed monthly cost, meaning that the APR (Annual Percentage Rate) is set before the contract begins. The finance agreement is secured against the vehicle and this provides the lender with some flexibility regarding the terms they can offer.

The amount you wish to borrow is based on the value of the vehicle you purchase, minus any deposit you are able to provide. A deposit can be in the form of cash element or a part exchange vehicle.

Finance Lease with a balloon

For customers wishing to only pay a Low Deposit
We can tailor deals from as little as £99+vat deposit.

This is a very popular form of acquiring a new or used vehicle where the vat is spread across the whole term! This allows customers who are not VAT registered the benefit of spreading the VAT across the term rather than having to pay it at once as an initial deposit.

This funding option can help you get the vehicle you need at the payment you can afford! It also helps cash flow and for non VAT customers who do then become VAT registered at some point during the lease period they can start to claim the VAT back.

The vehicle can be part exchanged at the end of the term and normally 95-100% of any equity can be used as a deposit on a new vehicle.

Or if you just simply wish to dispose of the vehicle you can sell it to a third party once the balloon figure is settled in full.

Business contract hire

Business contract hire is a popular long-term vehicle rental agreement suitable for sole traders, partnerships and limited companies.

It’s a particularly popular option for VAT registered companies, as they can claim the VAT back on the payments of commercial vehicles.

How could it work for your business?

If your company leases a vehicle on a contract hire basis, you will pay to rent the vehicle in monthly instalments for a contract of 24 or 48 months, for example. Once the contract is up, the vehicle is returned to the leasing provider, leaving them to worry about depreciation values and disposal of the car or van.

Contract hire means your company can concentrate on its core activities, while avoiding the financial risk and administrative burden of owning your vehicle or fleet.

Asset Refinancing

Asset Refinancing is the process by which you can use existing assets to raise additional capital for a variety of purposes.

The assets can be free from finance or subject to an existing finance agreement with a finance company, but would have sufficient equity to allow it to be refinanced and released.


01827 894860



8:00am – 8:00pm


01827 894860



8:00am – 8:00pm