If you’ve been turned down for car finance before, you might be wondering if getting a car on HP with bad credit is even possible. The good news is that it can be – but there are some important things to know first. At ClearScore, we want to make car finance easier to understand, so you can feel confident when making big financial decisions.
Hire purchase – often shortened to HP – is a type of car finance where you: Pay an initial deposit (usually around 10% of the car’s value) Make fixed monthly payments over an agreed term (normally 1–5 years) Own the car outright once you’ve made the final payment Unlike personal loans or leasing, the car itself is the security for the loan. That means you don’t officially own it until the agreement is finished. 👉 Learn more about the different types of car finance.
Yes – but it might be trickier. Because the car is used as security, lenders may be more open to offering hire purchase than other types of finance. However, if you have a history of missed payments, defaults or a low credit score, you might:
Face higher interest rates
Need to put down a larger deposit
Have fewer lender options to choose from Some specialist lenders focus on helping people with poor credit histories. But it’s important to make sure the monthly repayments are affordable, otherwise you risk falling behind – which can damage your credit score further.
Check your credit score and report for free to see where you stand before applying.
If you’re looking for a car on HP with bad credit, here are some practical steps that could help:
Check your credit report first – Look for mistakes or outdated information. You can dispute errors on your report if you find any.
Pay down existing debts – Lenders like to see that you can manage current commitments.
Save for a bigger deposit – The more you put down, the lower the risk for the lender.
Avoid making lots of applications at once – Too many searches in a short time can lower your score.
With hire purchase, if you don’t keep up with repayments, the lender could take the car back. Missing payments may also leave a negative mark on your credit report. That’s why it’s crucial to think carefully before signing an agreement. Ask yourself: can you realistically keep up with the monthly payments for the full term?
Getting a car on HP with bad credit isn’t always easy, but it is possible. Lenders may offer you finance if you can show you’re working on your credit and can afford the repayments. Before you decide, make sure you:
Check your free ClearScore report
Compare HP deals carefully
Think about whether you can comfortably meet the monthly cost
Taking a little time to prepare could make the difference between being declined and driving away in your new car.