HP agreements - how not to use car credit

In the same way that car dealer finance is often uncompetitive, using hire purchase to finance your new vehicle can be much more expensive than getting separate car credit from a finance company.

If you are considering taking out a hire purchase agreement and you want to compare costs, ask the provider for the 'total amount repayable' figure. Then ask the same question during your search for other kinds of car credit, and you will know which deal offers the best value.

The major consideration of hire purchase is that you don't actually own the car until you have made all your payments. One the one hand, this does mean you can return the car mid-way through your repayment period if you decide you don't want it any more.

On the other hand, if you want to keep the car but you miss a payment, the car can be repossessed under the terms of the hire purchase agreement. To add insult to injury, you can sometimes be required to keep paying for the car - even if it has been taken away from you!

Straightforward car credit is usually the best option if you want to own the car outright and ensure it stays in your possession.