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.