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HIRE PURCHASE
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 instalments. 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.
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