Bank Loan or HP

[Northernnnnnn]

After having lease cars for the past few years, we are in the process of getting rid of these and owning a car outright to reduce our debt. Both of the lease cars were in negative equity, however we just couldn't justify the monthly payments anymore for something we don't get to own, and we only need one car in our current circumstances.
The first car has now gone, and the second is due to be part exchanged this week with our hopefully new (to us) car.
The car costs just over 12k, and we have a solid plan to have paid this off in 6 months, and a second plan to have paid off in a year if our circumstances change. We were planning on taking a bank loan for this, due to the interest being almost half, however a dealer we spoke to yesterday said that if we are paying off in a shorter period then HP is more sensible. He didn't give us any more information as we didn't want to buy his overpriced car, but I'm doubting myself now and wondering if he is right?

Thank you

I would go for the loan in your circumstances, far more straightforward. I use HP for my car but only if I can get a 0% finance deal over 5 years, which are thin on the ground these days.

The dealer is an interested party; they get commission on the HP deal.

From your point of view which is cheaper over the 6months-1 year?

If you get a loan, the car belongs to you.
With hire purchase, you're effectively hiring the car until you've finally paid for it.

Do you need a £12k car? You could get something cheaper and have a smaller loan you could pay off more easily.

I would go for the loan, then you are a cash buyer and may be able to get a bit off the price. The trouble with buying cars is knowing what the 'real' price is and with an HP deal on top it becomes really opaque.

Thank you all, this is confirming what I thought. I don't think we need a 12k car, however dh wanted a 20k car so this is the best compromise I could do on a joint purchase. We want something that will last 7-8 years so hopefully spending a bit more will help ensure that.

I'll start shopping around for loan deals. I also thought about trying to get a 0% credit card but I don't think dealers accept this and it is a high amount to borrow.

DONT buy a £12k car on a credit card!!!

Having looked at cars again today you dont get much for 12k, I was looking at cars that are nearly 10 years old for that price!

You can do card swapping to make sure you only pay 0% if you think you can pay it off in 6 months or 12 at the most

Whats the ful amount you need to borrow if you're part exchanging?

You can do balance transfers