How to get approved for HP Car finance (UK)

Your fast-track guide to HP approval in the UK

Why this matters now

Hire Purchase is one of the most straightforward ways to own a car in the UK. Get your credit position right, line up the right documents, and compare smartly to secure approval and a fair APR without surprises.

Predictable payments and full ownership make HP a solid choice for UK drivers.

Who should read this

If you are a UK resident planning to finance a new or used car and prefer fixed monthly payments with ownership at the end, this guide is for you. It suits first-time buyers, those rebuilding credit, and anyone comparing dealer, manufacturer, and broker HP offers.

The essentials in plain English

Key terms to know

• Hire Purchase (HP): You pay a deposit, then fixed monthly instalments over 1 to 5 years. When the final payment is made, you own the car outright. No mileage limits and no balloon payment.
• APR: The annual cost of borrowing that includes interest and standard fees. Most representative APRs at UK dealerships sit around 5% to 10%, higher if your credit is weak. Some manufacturer deals can be 0% for eligible buyers.
• Deposit: Often 10% or more of the car price. Some lenders offer no-deposit HP, typically for stronger credit profiles. Manufacturer deals may include deposit contributions.
• Affordability check: Lenders must assess your income, regular outgoings, and debts to ensure repayments are manageable. Approval is always subject to status.
• Soft search vs hard search: Soft checks show likely eligibility without affecting your credit score. Hard checks are recorded on your file and several in quick succession can lower your score.
• Terms and mileage: HP has fixed terms and no mileage restrictions, unlike PCP. Early settlement is possible but may include fees.

Understanding APR is about what you will pay in real terms over time.

Where to shop for HP deals

Comparing your options

Use both online and in-person quotes to find value. Manufacturer offers can be sharp, while independent dealers and brokers add choice for mixed credit profiles.

• Check national deal sites to benchmark prices and rates alongside local dealerships.
• For used cars, expect APRs to trend higher as the vehicle ages or mileage increases.
• If your credit is thin or impaired, a broker that uses soft-search pre-approval can minimise credit score impact while you shop.

Costs, total impact, and risks

• Interest rates: Most buyers will see 5% to 10% APR at mainstream dealerships. Lower for promotional manufacturer finance. Higher if credit is poor or the car is older.
• Deposit effect: A larger deposit reduces monthly payments and total interest. No-deposit HP usually means higher APR or stricter criteria.
• Term length: Longer terms cut monthly cost but increase total interest paid. Balance affordability with overall cost.
• Ownership: With HP you own the car after the final payment. That is different to PCP, which ends with a choice to pay a balloon, return, or trade in.
• Risks: Missed payments harm your credit and could lead to repossession. Multiple hard applications within a short period can depress your score and raise future borrowing costs.

Fixed instalments help budgeting. The wrong APR or term can still cost you more than you expect.

Do you qualify

You will need to meet lender criteria and UK regulations:

• Age and residency: 18 or over and a UK resident.
• Credit status: Lenders assess credit history across Experian, Equifax, and TransUnion. Weaker credit does not exclude you but expect higher APR and tighter affordability checks.
• Income and stability: Regular income, employment details, and manageable existing commitments are essential.
• Affordability assessment: Mandatory review of income, bills, debts, and dependants to ensure repayments are sustainable.
• Vehicle fit: HP is offered on new and used cars. Age and value of the vehicle can influence the rate and maximum term.
• Documents needed: Valid passport or driving licence, proof of address, recent payslips or bank statements, employment details, details of existing credit, and vehicle information. Some lenders request proof of insurance before handover.

Having these ready speeds decisions and reduces back-and-forth.

From search to keys in 7 steps

1. Check credit score with UK bureaus using soft-search tools.
2. Set budget and deposit target based on affordability.
3. Gather ID, address, income and insurance documents.
4. Compare manufacturer, dealer and broker HP offers.
5. Use pre-approval to test eligibility without credit impact.
6. Submit one full application to your chosen lender.
7. Review agreement, sign, arrange handover and insurance.

Weighing the upsides and trade-offs

Pros

• Predictable payments and clear path to ownership
• No mileage limits or balloon payment at the end
• Widely available for new and used cars across the UK
• Soft-search pre-approvals reduce credit risk when shopping

Cons

• Total interest can be higher on long terms
• Higher APRs for bad credit or older vehicles
• Missed payments damage credit and risk repossession
• Early settlement may involve fees or rebate calculations

Smart checks before you sign

• Compare total payable, not just the monthly figure.
• Watch for add-ons like GAP or warranties that you do not need.
• Confirm fees: option to purchase, documentation, early settlement.
• Avoid multiple hard applications in a short period.
• Verify deposit contributions and 0% deals eligibility criteria.
• For used cars, consider inspection and service history to protect value.

A five-minute read of the small print can save you hundreds over the term.

If HP is not the perfect fit

• PCP: Lower monthly payments but a balloon at the end and mileage limits. Suits those who change cars frequently.
• Personal Contract Hire: You lease without ownership. Usually the lowest monthly cost but you hand the car back.
• Personal loan: Unsecured loan from a bank or credit union. You own the car outright from day one and can sell freely.
• Credit union finance: Often competitive rates, especially for members, with community-based underwriting.

Use a like-for-like comparison on term, deposit, APR, mileage limits, and end-of-term obligations.

Quick answers to common questions

• Will checking my eligibility hurt my score? Most lenders offer soft-search pre-approval that does not affect your score. A full application uses a hard search that is visible on your file.

• Can I get HP with bad credit? Yes. Specialist lenders and brokers accept weaker credit with higher APRs. Evidence of stable income and lower existing debts improves your chances.

• How much deposit do I need? Many HP deals ask for around 10%. Some manufacturer offers include deposit contributions, and some lenders offer no-deposit options for strong applicants.

• Are there mileage limits on HP? No. HP does not set mileage caps, unlike PCP. You simply make your fixed payments to the end and then own the car.

• What documents will I need? Photo ID, proof of address, recent payslips or bank statements, employment details, details of existing credit, and car information. Some lenders request proof of insurance before collection.

• How long does approval take? If documents are ready and the lender uses automated checks, approval can be same day. Complex cases or document gaps can stretch this to a few days.

Your next moves

• Check your credit score and tidy any errors this week.
• Decide your maximum monthly payment and realistic deposit.
• Gather documents so you can apply once, cleanly and confidently.
• Compare online and local dealer HP quotes side by side.

One focused application beats several rushed ones.

If you want help sense-checking quotes, Switcha can guide you on rates, terms, and eligibility so you only apply where you are likely to be approved.

Important information

This guide is for general information only and is not personal financial advice. Approval is subject to status, affordability, and lender criteria. Always read the full agreement and seek independent advice if unsure.