Introduction
Hire purchase is simply a loan agreement to hire
with the option to purchase. You enjoy all the
benefits of using the car, whilst the finance
company retains an interest in the vehicle until
the last payment is made.
How it works
A deposit is paid on delivery of the vehicle,
leaving the balance plus interest paid over an
agreed period by equal monthly installments. Full
title passes to you upon final payment.
Benefits
• Fixed rate of interest means easy budgeting
• Low initial capital outlay
• Releases savings for other uses
• Repayments are tailored to suit your budget
• Ownership at the end of the agreement
• Keeps important bank credit line intact
• Allows interest to be earned on savings
• Convenient, with quick decision and simple
application
• Covered under the “Consumer Credit
Act”
Disadvantages
• Finance Company retains an interest in
the vehicle until the last payment is made.
