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Can you end a Hire Purchase agreement early?

Yes, there are two main ways to end a car hire purchase agreement early:
Settle your finance early
You can request a settlement figure from your lender at any time. You’ll need to pay this figure to end the agreement early and become the car’s legal owner. It’ll typically be made up of your outstanding repayments minus any future interest. An early settlement charge may also apply.

Opt for voluntary termination
Under the Consumer Credit Act 1974, you have the right to voluntary termination once you’ve paid at least 50% of the total amount repayable on your loan. If you’ve not yet reached this threshold, you can choose to pay the difference. Opting for voluntary termination means you’ll hand the car back to the lender and walk away.

Related FAQs

If I finance a car, can someone else be the registered keeper?

Most lenders won’t let you finance a car if someone else is going to be the registered keeper. That’s because car loans are tailored to an individual and based on their personal financial circumstances. If you try to take out a loan for someone else and don’t tell the lender, you could be guilty of fronting, which is a type of fraud.

Can I buy a car on finance for someone else?

It’s not usually possible to buy a car on finance for someone else. In fact, most lenders will ask that the person who signs on the dotted line is also your new wheels registered keeper and main driver. Every car finance agreement is tailored to an individual and suited to your personal circumstances.

What deposit do I need to finance a car with HP?

While no deposit HP car finance is available, putting money down upfront could reduce the amount you need to borrow and improve your chances of securing a loan. Typically, a deposit of 10% of the car’s purchase price is considered good.

Will buying a car on HP finance affect my credit rating?

When you sign the HP finance agreement, your credit rating will likely dip as a large new loan will appear on your report. However, your credit score should quickly recover as soon as you start making repayments on time. If you keep up with your payments throughout the agreement, your score could even improve over time. On the other hand, if you fall behind and make late repayments, your credit score could be negatively impacted.

Getting a car finance quote through Young Car Driver won’t affect your credit score. We’ll carry out a soft credit check to double-check your eligibility, but a hard credit check (that could affect your score) will only take place if you decide to proceed with a loan option.

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