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Hire purchase

Hire purchase agreements (commonly known as HP) are usually taken out to purchase cars. The car does not become your property until you have made all the repayments on it, which typically last between three and five years. If you fall behind on the repayments, the lender may be able to take the car back, so you must treat this as a priority debt if you need to keep the vehicle.

Most HP agreements are regulated by the Consumer Credit Act, which gives you certain protections as a consumer. For example, if you have paid more than one third of the balance on a regulated HP agreement, the lender cannot take the car back without going to court first.

Read more about hire purchase if you live in England or Wales.

Read more about hire purchase if you live in Scotland.