The figures to compare
The vehicle price minus any cash deposit or accepted part exchange normally determines the amount of credit. Interest and any fees are then added according to the agreement, producing the total amount payable.
APR is designed to help compare the annual cost of borrowing, including certain charges. Representative APR is not a promise that every applicant will receive that rate. Your rate may be higher or lower depending on the provider's assessment.
- Vehicle price
- Deposit
- Amount of credit
- APR and interest
- Agreement term
- Total amount payable
How the term changes the payment
Spreading the same amount over more months can reduce each payment, but it can increase the overall interest paid. A shorter term can mean higher monthly payments and a lower total cost of credit, depending on the agreement.
Choose a monthly payment that remains affordable alongside insurance, tax, fuel, servicing and unexpected vehicle costs.
Hire purchase in simple terms
With hire purchase, the finance provider normally owns the vehicle until all required payments and any option-to-purchase fee have been made. The agreement is usually secured against the vehicle, so missing payments can place the car at risk.
Read the pre-contract information and agreement carefully. Ask questions if the ownership point, early settlement, missed-payment consequences or any fees are unclear.
