HIRE PURCHASE
Hire Purchase is the most popular method – amongst private and business customers - of funding a vehicle.
Hire Purchase is an independent form of finance which frees up any credit line or overdraft facility a customer has with their bank.
Hire Purchase involves the customer paying a deposit which is a percentage of the vehicle price.
The actual amount varies according to:
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customer requirements any special finance schemes that may be available the period of the finance agreement the age and type of vehicle. The deposit is deducted from the price of the vehicle and the balance is payable over an agreed period. This is by fixed monthly instalments which include an element of interest.
‘Balloon’ Hire Purchase operates the same as fixed rate hire purchase. The difference is a ‘balloon’ payment at the end of the contract. This payment is based on a percentage of the vehicle price which is deferred until the end and has the effect of reducing the monthly repayments to suit the customer’s budget.
