What is a hire purchase?
Hire purchase is a common method used to finance a new or used vehicle. The buyer usually pays a deposit and then the remainder of the money is taken out as a loan secured on the vehicle. This loan is usually paid over a period of 12 to 60 months (one to five years). The buyer continues to pay monthly instalments over the agreed period of time.
Who owns the vehicle?
The ownership of the vehicle belongs to the seller until the full loan is paid. This is because the loan is secured against the vehicle. Hire purchase agreements commonly attract a small interest percentage, which is usually detailed in the initial contract, so in theory, there should be no surprises.
So what can go wrong?
READ THE TERMS AND CONDITIONS!
A very cliché statement, but it really is important to ensure you understand the terms of the loan. A lot of common problems arise as lenders act in haste, often neglecting the governing terms and conditions. Consumers, being unaware of their rights, tend to be at the mercy of such lenders.
What type of cases do we see?
Often, we see cases where a client disputes one or more of the following:
- a faulty vehicle
- vehicle not of satisfactory quality
- excess mileage and damage charges
- mis-sale or misrepresentation
What to do if I can’t afford repayments
Simply put, if you fail to meet your monthly payments, you can potentially lose your vehicle. Lenders do have a duty towards consumers and ought to exercise this through any proceedings.
If you find yourself in such a position, you can always get in touch with us, where we can challenge and assist you through the process.
What information do I need to provide you with?
To investigate such a matter, we will request a copy of the credit agreement and require details such as:
- a chronological summary of what happened.
- any invoices and/or inspection documents if applicable.
- evidence such as call recordings and or letters between you and the party (or parties) involved.
