What is hire purchase (HP)?

Buying a car under hire purchase is one of the most common ways to own a car.

This Knowledge Base category provides the basics, explains the common terms used in hire purchase agreement and gives some tips on hire purchase financing.

Hire purchase (HP) is the hiring of goods with the option to buy the goods at the end of the hire purchase term.

If you take on HP financing, you are the hirer and financier is the owner.

As a hirer, you will have to repay the financier based on the agreed duration while you have possession of the vehicle.

When all the instalments are paid up, ownership is then transferred to you.


Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)

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Knowledge Base ID :   1295
Last Reviewed :   May 22, 2014
Source :   BankingInfo
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