This type of finance can be used to purchase a new or used car. This is because typically you’ll have to pay a deposit of 10% of the car’s value and then pay off the balance as monthly instalments, as the loan is set against the vehicle. Although both car dealerships and brokers can arrange a hire purchase loan.
Some Positives Include:
• Firstly, you will have a flexible payment period, ranging from one to five years to suit your financial circumstances. But it is important to remember that the longer the period, the more interest you will have to pay.
• Secondly, no deposit is required.
• Thirdly, You often have the option to return the car, once you have paid off 50% of it and thus, you won’t have to commit to further payments.
• Finally, It normally comes without mileage limits.
Things To Think About:
• Until you’ve made the final payment, you won’t own the car.
• Also you are not allowed to sell or change the car in any way without seeking permission beforehand.
• Thirdly, Monthly repayments tend to be more compared to PCP and other leasing schemes.
• Lastly, It can prove costly if you only need a short-term arrangement.