What’s the difference between a personal car loan and hire purchase?

There are a few key differences between personal car loans vs hire purchase (HP) agreements:

So here’s a point by point breakdown.

  • You can borrow more with HP – up to £200,000;
  • HP agreements place the burden of security against your car, whereas a personal loan is not;
  • With a personal loan, you’ll always own your car from the point of purchase. But with HP agreement, you’ll own your car once you make the last payment;
  • You might need a deposit with for HP, you won’t with a personal loan;
  • You have more flexibility on where you can buy your car from with a personal loan;
  • There may be mileage restrictions with HP while you pay off your finance.