HP Hire Purchase Balance Calculator

Information and how to use

Use our hire purchase (HP) balance calculator to get the current balance of your contract. You will be able to see what you have paid and how much is remaining outstanding by just entering your contract start date and a few details regarding the contract, such as interest rate the and vehicle price.

You will see the possible settlement value and if you are eligible to hand the vehicle back if 50 percent of payments have been made.

Hire purchase (HP) is one of the methods of finance available if you would like to obtain a vehicle but do not have the available to pay for it upfront. Once you have paid a deposit you are bound to a contract of fixed monthly payments for a term agreed at the outset. When the final payment has been made you will own the vehicle. The finance company has no interest in the final value of the car and thus normally there are no mileage limits.

HP is generally easier to obtain than a bank loan as the finance is secured on the vehicle, and a deposit is required before the first payment. Due to this HP, in some circumstances, can be offered where a personal loan from your bank may be declined. The disadvantage here is that the bank loan requires no deposit and may be at a lower APR.

Upon making the final payment the vehicle is yours outright - you make payments covering the entire cost of the car minus your deposit. This means that it is your responsiblity as to what you do with the vehicle. There is no GMFV (Guaranteed Minimum Future Value) or Balloon where the dealer/finance company takes the risk of the car depreciating more than expected.

An advantage of HP is the ability to voluntarily terminate the agreement. This may be an option particularly if you struggle to make payments down the line. You can end the HP agreement early if 50 percent of the total borrowed plus interest has been paid back. There will no be no further charges once the vehicle is handed back to to the finance company as long as the condition is within normal wear and tear rules. Our calculators will show you the point at which a termination can be made with no further charges. Interestingly, if you take out a PCP contract it is difficult to take advantage of the 50 percent rule as the total borrowed amount includes the balloon.