Hire purchase (HP)
Cards & borrowingA type of car finance where you pay in instalments and own the car at the end.
Overview
HP agreements are secured against the vehicle and often include a deposit.
The car becomes yours after the final payment.
Why it matters
- It is a common form of car finance in the UK.
- Missing payments can lead to repossession.
- It adds a credit account to your report.
FAQs
Is HP a secured agreement?
Yes. The car acts as security for the finance.
Does HP affect my credit score?
Yes. Payment history on the agreement is reported.
Related terms
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