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One way of financing a car is through a process known as ‘hire purchase’, which allows you to take ownership of a car once all repayments are made. After putting down an initial deposit (usually a minimum of 10%), you can borrow from £5,000 to buy a new or used car up to five years old and defer repaying up to half of the original hire purchase loan amount.
 
Car loans

The main advantage of a Hire Purchase agreement is that you can spread the cost of the purchase.

Defer the cost
You can defer paying back up to 50% of the loan until the end of your agreement. The amount you can defer as a balloon payment is dependent on the type and age of the car and the term of the loan.

Deferring part of the purchase price until the end of the agreement means you will pay more interest than you would have paid had the whole purchase price been repaid evenly over the period of the agreement.

Flexible repayment term
You can spread your monthly fixed repayments over two to five years. At the end of the loan agreement, you can either pay the outstanding amount and take full ownership of the car or sell the car and use the money to pay off the deferred amount.

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