Buying a vehicle using hire purchase does have some advantages over other forms of car finance, but it does also have some disadvantages. Hire purchase isn’t necessarily a cheaper form of car finance, and borrowers don’t actually own the car until they have made the final, or balloon, payment.

Understanding more about hire purchase and personal contract purchase could help consumers to make more accurate vehicle finance decisions. Consumers considering hire purchase need to focus clearly on one particular rate – total amount repayable. This is the figure for comparison with other motor finance alternatives.

There are benefits to hire purchase, for instance you can return the car and stop making repayments, at some point, under some contracts. Consumers thinking about using hire purchase to finance a car need to carefully review their options to decide on the most economical path.