Bad credit car financing

Hire purchase (or HP) is a form of car finance for people with bad credit. It’s not specifically car finance with bad credit but having a poor credit history won’t necessarily stop you getting a hire purchase car.

How does hire purchase work?

If you take out a hire purchase agreement as a way to finance a car with bad credit, you will make payments on the car every month and at the end of the repayment term you will own your car outright.

Not everyone knows this, but with any hire purchase agreement, you can stop making payments halfway through the agreement (ony at the halfway point), and give your car back. Then you’ll be free of the HP contract, but also your car. This is always good to keep in mind if your financial circumstances change or you decide you no longer wish to have that particular car.

Car hire purchase: Pros

• Brand new car
• No down payment
• Monthly payments makes it easier to budget
• Own your car at the end of the HP agreement
• Can give the car back halfway through the agreement
• No mileage contract

Car hire purchase: Cons

• Higher repayments than a car loan
• Car’s value depreciates by the end of the HP agreement
• You don’t own your car until the end of the agreement

Hire purchase car finance

Hire purchase is a way to finance a car with bad credit. Before you decide on hire purchase, see if a car loan or car leasing might be more suited to you.