Despite the word 'hire', Hire Purchase is about ownership. If you use Hire Purchase to finance the purchase of a car, it is actually committing to buying the car outright via a secured loan that is paid back monthly across the agreed period (usually 3-5 years). Monthly payments are therefore much higher than when 'leasing' or using PCP.
And compared to Personal Contract Purchase (PCP), if the final 'balloon payment' is paid to acquire the car, then a Hire Purchase agreement would likely have been cheaper overall even considering notably higher monthly payments.
Compared to Personal Contract Hire, if you intend to own and retain the same car for more than 4 or 5 years, than Hire Purchase is cheaper over the long term than leasing because there are no further payments once you own it completely.
Compared with Personal Contract Hire or Personal Contract Purchase:
Choosing the most cost-effective method of funding a vehicle for your business can be a daunting task. Our Transit Centre advisors listen to your needs and take into account your situation before recommending a funding option for you. Please call one of our team today for impartial, practical advice about financing your vehicle. We are here to help and find solutions that work for both you and your business.