What is Hire Purchase for a RIB?
Hire purchase (HP) is the dominant finance structure for RIBs, sports boats, and leisure craft in the UK. It is a secured lending product: the finance company purchases the vessel and 'hires' it to you under a credit agreement. You make fixed monthly payments over an agreed term - typically between 3 and 15 years - and legal ownership transfers to you when the final payment is made.
The key features of marine hire purchase are:
- Fixed rate - your monthly payment does not change during the agreement, regardless of interest rate movements. This makes budgeting straightforward.
- Secured against the vessel - the lender's security is the boat itself, not your home. Missing payments can result in repossession of the vessel.
- Ownership at completion - unlike a lease, you own the boat outright at the end of the term.
- Early repayment permitted - you can repay the facility early, though an early repayment charge may apply.
- FCA regulated - HP agreements for private individuals are regulated by the Financial Conduct Authority, providing statutory consumer protections.
Standard HP vs Balloon HP - Which is Right for You?
| Feature | Standard Hire Purchase | Balloon Hire Purchase |
|---|---|---|
| Monthly payments | Higher - full capital repaid evenly | Lower - only part of capital repaid during term |
| Final payment | Standard payment - same as others | Large 'balloon' payment at end of term |
| Total interest | Lower - capital reduces faster | Higher - capital deferred increases total interest |
| Ownership | Automatic at final payment | Automatic at final payment (incl. balloon) |
| Options at end | Own the boat | Pay balloon / refinance balloon / return vessel (some lenders) |
| Best for | Buyers who want to minimise total cost | Buyers who prioritise monthly cashflow |
| Availability | All panel lenders | Selected specialist lenders |
Worked Example - HP Finance on a £45,000 RIB
Vessel: 2023 Humber Destroyer 8.0, valued at £45,000
Deposit: £9,000 (20% - 80% LTV)
Finance amount: £36,000
Scenario 1 - Close Brothers, 6.9% APR, 7-year standard HP:
- Monthly payment: approximately £543
- Total repayable: approximately £45,612
- Total cost of purchase (incl. deposit): approximately £54,612
- Total interest cost: approximately £9,612
Scenario 2 - Close Brothers, 6.9% APR, 10-year standard HP:
- Monthly payment: approximately £418
- Total repayable: approximately £50,160
- Total cost of purchase (incl. deposit): approximately £59,160
- Total interest cost: approximately £14,160
Scenario 3 - Balloon HP (selected lender), 8.5% APR, 5-year term, £12,000 balloon:
- Monthly payment: approximately £455 (on the non-balloon capital)
- Balloon payment at end of year 5: £12,000
- Total repayable (ex-balloon): approximately £27,300 + £12,000 balloon = £39,300
- Total cost of purchase (incl. deposit): approximately £48,300
All figures are illustrative. Actual payments depend on the precise rate offered, arrangement fees, and any insurance products included. We provide a full personalised cost breakdown before you commit to any agreement.
The HP Application Process - Step by Step
- 1Identify your vessel and agree a price - either with a dealer or in a private sale.
- 2Approach a broker - provide your personal details, income information, and vessel details.
- 3Soft credit search - we initially use soft searches to identify the most suitable lenders without impacting your credit file.
- 4Full application submitted - to the lender(s) most likely to offer the best terms for your profile.
- 5Credit decision - typically 24–48 hours for straightforward cases. We handle lender queries on your behalf.
- 6Agreement signed - you sign the HP agreement, which is regulated under the Consumer Credit Act (for personal borrowers).
- 7Funds released - the lender pays the dealer or private seller directly. You take possession of the vessel.
- 8Monthly payments begin - typically 30 days after completion. Payments are collected by direct debit.
Lender HP Rates - October 2026
| Lender | HP Rate from | Max Term | Max LTV | Min Loan |
|---|---|---|---|---|
| Close Brothers | 6.5% APR | 10yr | 80% | £5,000 |
| Lombard | 6.8% APR | 7yr | 75% | £10,000 |
| Black Horse | 6.9% APR | 10yr | 80% | £5,000 |
| Barclays | 7.2% APR | 7yr | 75% | £10,000 |
| Pegasus | 7.5% APR | 15yr | 85% | £3,000 |
| United Trust | 7.8% APR | 10yr | 75% | £10,000 |
| Shawbrook | 8.2% APR | 7yr | 70% | £10,000 |
| Aldermore | 8.2% APR | 7yr | 70% | £10,000 |
| Together | 8.5% APR | 7yr | 70% | £10,000 |
| Rankin | 9.2% APR | 15yr | 85% | £3,000 |
Consumer Protections on Marine HP Agreements
HP agreements for private individuals in the UK are regulated under the Consumer Credit Act 1974 and the FCA's Consumer Credit sourcebook (CONC). Key protections include:
- Section 75 protection applies only to credit card purchases, not HP agreements - but HP lenders have their own obligations to borrowers in financial difficulty.
- Forbearance obligations - FCA-regulated lenders must treat borrowers in financial difficulty fairly and consider reasonable forbearance options (payment holidays, term extensions) before taking enforcement action.
- The 'one-third rule' - once you have paid more than one-third of the total HP price, a lender cannot repossess the vessel without a court order.
- Early settlement rights - you always have the right to settle the agreement early, subject to any applicable ERC.
- Voluntary termination - once you have paid 50% of the total HP price, you may be able to voluntarily terminate the agreement and return the vessel in some circumstances.