Understanding Hire Purchase

• Hire Purchase (HP) is a simple and straightforward way to finance your next car.
• It gives you an option to own the car at the end of the agreement.
• The APR (Annual Percentage Rate) is set before the contract begins.
• Flexible loan period – you choose any period to suit your budget between two to five years.
• You are the ‘registered keeper’ of the car and responsible for the insurance and maintenance of the car.
• The finance company remains the legal owner until the amount you borrowed has been fully repaid.

ADVANTAGES OF HIRE PURCHASE

• Quick and easy to arrange.
• Monthly payments to suit you.
• Flexible deposit options.
• Choice of payment terms between 24 and 60 months (2-5 years).
• Repayments remain the same amount throughout the agreement.
• No mileage restriction.
• Most consumer credit agreements are regulated, giving you additional rights and protections under law.

IMPORTANT THINGS FOR CONSIDERATION

• The finance company owns the vehicle until you make all your payments including the Option to Purchase Fee.
• Since you do not own the car until all payments have been made, you cannot sell or modify it without the finance company’s permission.
• It is important that you keep up to date with your monthly repayments, if you are having any difficulties, the vehicle may be at risk.
• You can end your agreement early. How far into your agreement you are will affect the amount left to pay the finance company.