Hire purchase is the plain one. You put down a deposit, pay the same amount every month for two to five years, and when the last payment clears the car is yours. No balloon, no mileage cap, no "what happens at the end" conversation. That simplicity is exactly why hp car finance is the most-searched finance term in Ireland — and why it is often the better fit for a used car than PCP.
The short answer: HP is the right finance for a 3–8-year-old used car you plan to keep. Bank HP in September 2026 is running at roughly 6.3%–8.8% APR (Bank of Ireland Finance 6.3%, AIB 8.78%), with manufacturer-subsidised HP on new stock from about 3.9%. Two legal protections come free with every HP agreement under the Consumer Credit Act 1995: the half rule (hand the car back once you have paid half the HP price) and the one-third rule (no repossession without a court order once a third is paid). PCP wins only if you want the lowest monthly payment on a new or nearly-new car and you are happy to change it again in three years.
What is hire purchase, and who actually owns the car?
With HP, a finance company buys the car and hires it to you. In the CCPC's words, "you are the registered owner of the car for tax and insurance purposes, even though you are not the legal owner." Legal ownership passes to you only when the final instalment and the purchase fee are paid.
So you cannot sell the car while finance is outstanding, and if the payments go wrong the car is the lender's security — which is where the half rule and one-third rule come in.
- Deposit: typically 10%–30% of the price in practice; Bank of Ireland Finance quotes "no minimum deposit", and AIB will fund "up to 100%" on most makes.
- Term: usually 1–5 years on a used car (AIB caps used cars at 5 years, new at 6).
- Rate: fixed for the term at every Irish bank — your repayment will not move.
- Fees: a documentation fee at the start and a purchase (completion) fee at the end. The CCPC gives a range of €50–€150 for documentation and €50–€75 for completion; the actual bank figures are €63.49 each at Bank of Ireland Finance and €63.49 and €12.70 at AIB (September 2026).
PCP is legally a form of hire purchase too — same Act, same rules. The difference is the big optional final payment (the GMFV) and the mileage limit that goes with it.
HP vs PCP vs personal loan in 60 seconds
We have two longer comparisons already — PCP vs HP vs personal loan and used-car finance explained — so here is the one-table version.
| Hire purchase (HP) | PCP | Personal loan | |
|---|---|---|---|
| Who owns the car during the term | Lender (you are registered owner) | Lender | You |
| Monthly payment, same car | Medium | Lowest | Highest (shortest terms) |
| Final payment | None — car is yours | Balloon (GMFV), typically €8,000–€15,000 on a new car | None |
| Mileage cap | No | Yes — excess-km charges | No |
| Half rule / one-third rule | Yes | Yes | No |
| Can you sell it mid-term? | Only after settling | Only after settling | Any time |
| Typical 2026 APR (bank) | 6.3%–8.8% | Manufacturer-subsidised from ~3.9% on new | 6.4%–9% (AIB green loan 6.40%, standard 8.95%) |
| Best for | 3–8-year-old used cars you will keep | New / 1–3-year-old, changing every 3 years | Older or private-sale cars, flexibility |
Sources: Bank of Ireland Finance rates page, AIB car loan page, CCPC hire purchase guide — all accessed September 2026.
What does HP cost in 2026? Rates, fees and two worked examples
There is no single "HP rate" in Ireland. Banks publish a fixed APR; manufacturer credit arms price by car and by campaign. Here is what the lenders' own pages say this month — they move, so check before you sign.
| Lender (checked Sept 2026) | HP APR | Published example | Fees |
|---|---|---|---|
| Bank of Ireland Finance | 6.3% fixed (5.85% for a BEV) | €20,000 over 60 months = €385.69/month, total cost of credit €3,268.38 | €63.49 doc, €63.49 purchase |
| AIB Car Finance (HP) | 8.78% fixed | €15,000 over 48 months = €367.65/month, total cost of credit €2,723.39 | €63.49 doc, €12.70 purchase |
| Kia Credit (via BoI Finance) — new car | 3.9% fixed on selected models | Picanto: 50% deposit, 48 months, €205.40/month | €63.49 doc, €63.49 purchase |
| PTSB consumer HP | Fixed rate — see ptsb.ie for the current APR | — | €63.33 doc, €63.33 purchase |
That lines up with the 5.9%–10.9% band our finance calculator uses (default 7.9%). The 10.9% end is dealer-arranged HP on an older car with a thin credit file. Sub-4% only exists on new cars where the manufacturer is paying for it. Credit unions rarely do HP — they lend a personal loan instead, at a rate that varies by union.
Worked example: €15,000 and €25,000 on HP
Approximate repayments and total interest at three rates, before fees (lenders fold fees into their APR, so their figure differs by a euro or two).
| Amount financed | Term | 6.3% APR | 7.9% APR | 10.9% APR |
|---|---|---|---|---|
| €15,000 | 48 months | €353/month · ~€1,950 interest | €364/month · ~€2,450 interest | €383/month · ~€3,400 interest |
| €15,000 | 60 months | €291/month · ~€2,450 interest | €301/month · ~€3,100 interest | €322/month · ~€4,300 interest |
| €25,000 | 48 months | €589/month · ~€3,250 interest | €606/month · ~€4,100 interest | €639/month · ~€5,650 interest |
| €25,000 | 60 months | €485/month · ~€4,100 interest | €502/month · ~€5,150 interest | €536/month · ~€7,150 interest |
On a €25,000 car, the gap between 6.3% and 10.9% over five years is about €3,000 — more than a year's fuel. Ask the dealer what APR they are quoting, then ring your bank. Dealers earn commission on finance they arrange (PTSB's own FAQ says so), which is not sinister, but it is a reason to compare.
The half rule: your right to hand the car back
Under section 63 of the Consumer Credit Act 1995, you can end an HP agreement at any time before the final payment falls due by giving written notice and returning the car. Your liability is capped at half the total hire-purchase price.
- If you have already paid at least half of the total HP price (deposit plus instalments plus fees, as set out in your agreement), you return the car and owe nothing more — apart from any arrears and any charge for damage beyond normal wear.
- If you have paid less than half, you return the car and pay the difference up to the halfway point.
- You can use the half rule even if you are in arrears. The CCPC's warning is explicit: do not sign a "voluntary surrender" form instead, because under voluntary surrender you stay liable for the whole debt after the car is sold, which "usually costs more than using the half rule."
A quick half-rule sum
Say the total HP price in your agreement is €20,000 (a €17,000 car plus interest and fees). Half is €10,000. You paid a €2,000 deposit and 18 instalments of €330 — €7,940 so far. To walk away under the half rule you would pay the shortfall of €2,060, hand back the keys, and the agreement ends. If instead you had paid 25 instalments, you would be past the halfway line and owe nothing further.
It is a blunt tool — you lose the car and every euro paid — but if your circumstances change, it is far better than defaulting. MABS and the CCPC both walk people through it for free.
The one-third rule: when repossession needs a court order
Section 64 of the same Act says that once one-third of the hire-purchase price "has been paid or tendered", the owner "shall not enforce any right to recover possession of the goods from the hirer otherwise than by legal proceedings." In plain English:
- Less than a third paid: the finance company can repossess the car without going to court (though the CCPC says it still cannot take it from your home or driveway without permission).
- More than a third paid: it must get a court order first. If it takes the car anyway, the agreement ends and you are entitled to recover everything you have paid.
Missed payments are not free, mind. The CCPC lists typical charges of around €25 per missed payment, €60–€70 to reschedule an agreement, and roughly €300 for a repossession. Ring the lender before you miss a payment, not after. Since 24 March 2026 the Central Bank's revised Consumer Protection Code has applied, and its suitability and affordability rules cover hire-purchase agreements — a lender is expected to have checked the deal suited you before you signed.
Settling early or trading in a car that is on HP
Most people trade in or clear an HP agreement before the last payment. Either way you need a written settlement figure from the lender; in practice it is usually valid for 10–14 days.
- You have a legal right to settle early. Section 52 of the Consumer Credit Act 1995 entitles you to discharge the agreement at any time, and the lender "shall allow a reduction in the total cost of credit". You do not pay all the future interest.
- But the rebate is not pro-rata. The CCPC notes that "the finance company decides the rebate amount" within the approved method, and some lenders charge an early-settlement fee on fixed-rate agreements. Get the figure before you assume the saving.
- Trading in: the dealer pays the settlement figure out of your trade-in value and you keep the difference (or owe it, if you are in negative equity). Know what the car is worth first — run it through our free car valuation tool so the trade-in offer and the settlement figure are both on the table.
- Selling privately: you must settle before the buyer pays, or use a lender-supervised handover. See how to sell your car in Ireland for the mechanics.
Age and mileage limits: why HP suits 3–8-year-old cars
Lender limits are set on the car's age at the end of the agreement — the detail people miss. A 7-year-old car on a 5-year term is 12 at the finish, and most lenders will not go there.
| Lender (Sept 2026) | Max age at end of term | Mileage / other | Minimum amount |
|---|---|---|---|
| Bank of Ireland Finance | 10 years | Term up to 10 years "depending on the age of car" | €7,000 |
| AIB Car Finance | Under 9 years | Used-car term 1–5 years | €5,000 |
| PTSB consumer HP | 10 years (20% deposit if older) | Under 180,000 km at application | Check ptsb.ie |
Map that onto the Irish used market and the sweet spot is obvious. On Autoza in September 2026, the median asking price for a 2018–2020 car is about €17,950 with a median of around 116,000 km; for a 2021–2023 car it is about €25,900 at roughly 90,000 km. Both sit comfortably inside every lender's age limit on a 4–5-year term, and both are above the €5,000–€7,000 minimum advance.
Below that — a 2012–2016 car at €8,000–€12,000 — HP gets awkward: the car ages out before the term ends and the APR creeps up, so a credit-union or bank personal loan is usually cleaner. Above it, on a new or 1–2-year-old car, PCP's subsidised rates start to win. For what your budget buys, see our guide to buying a used car in Ireland.
So when does HP beat PCP? The verdict
Choose HP when:
- the car is 3–8 years old and you intend to keep it past the end of the agreement;
- you do high mileage — PCP's excess-km charges hit rural commuters and reps hardest;
- you want the total cost of credit to be lower — no balloon means no second round of interest on a refinanced GMFV;
- you value a fixed, predictable end: last payment, purchase fee, VRC in your name.
Choose PCP when: it is a new or nearly-new car, the manufacturer is subsidising the rate (Kia's 3.9% is a fair example), you drive under the mileage cap, and you genuinely want to change the car again in three years. If you would keep it, the "optional" balloon becomes a mandatory one, and HP would have been cheaper.
Choose a personal loan when: the car is older than the banks' limits, you are buying privately, or you want to own it outright from day one. EV footnote: AIB's green loan at 6.40% APR and Bank of Ireland's 5.85% BEV HP rate make an electric car a little cheaper to finance than the equivalent petrol or diesel.
This article is general information, not financial advice. Rates and fees were checked at each lender's own website in September 2026 and change without notice — confirm the current figure with the lender before you sign.
Frequently Asked Questions
What is the half rule on car finance in Ireland?
Under section 63 of the Consumer Credit Act 1995 you can end an HP or PCP agreement at any time by returning the car; your liability is capped at half the total hire-purchase price. If you have paid less than half, you pay the shortfall up to the halfway point; if you have paid half or more, you owe nothing further beyond arrears or damage.
What is a typical HP car finance rate in Ireland in 2026?
Bank HP is roughly 6.3%–8.8% APR fixed (Bank of Ireland Finance 6.3%, AIB 8.78%, September 2026), dealer-arranged HP on older cars can reach about 10.9%, and manufacturer-subsidised HP on new cars is available from around 3.9%. On €20,000 over five years at 6.3% the total cost of credit is about €3,270.
Can the finance company repossess my car on HP?
Only without a court order if you have paid less than one-third of the total hire-purchase price. Once a third is paid, section 64 of the Consumer Credit Act 1995 requires legal proceedings, and the CCPC says the car cannot be taken from your home or driveway without permission at any stage.
Can I sell a car that is still on hire purchase?
Not until the agreement is settled — the finance company is the legal owner. Ask for a written settlement figure, clear it (or have the dealer clear it from your trade-in value), and only then transfer the VRC to the buyer.
What fees come with HP in Ireland?
A documentation fee at the start and a purchase fee at the end — €63.49 each at Bank of Ireland Finance, €63.49 and €12.70 at AIB, €63.33 each at PTSB (September 2026). The CCPC lists typical ranges of €50–€150 and €50–€75 respectively, plus around €25 per missed payment.
Once you know what you can afford each month, the rest is finding the right car at the right price. Search used vehicles on Autoza — set your budget and filter by year to stay inside your lender's age limit.
