Hire purchase is a fixed cost, fixed period loan linked to (or secured on) the purchase of a vehicle. What makes the Hire Purchase product different from the Conditional Sale is that within the agreement there is a small option to purchase fee included. With the Option to Purchase Fee, the customer can either choose to pay and own the vehicle or refuse the fee and hand the vehicle back if they wish to. However, it’s not recommended that customers do this as they have effectively paid all of the installments to keep and own the vehicle.
Who is the product suitable for?
It is suitable for customers who want to own the vehicle once they have made all of the necessary payments.
How does it work?
The customer will usually pay a deposit or part exchange their old vehicle as a deposit (or both) then make regular monthly repayments to repay the balance, it’s that simple. As your interest rate is fixed you’ll know exactly how much you’ll repay at the outset of the agreement. The loan is secured against your car. Once all the installments have been paid, you have the choice of owning the vehicle at a small Option to Purchase Fee, or you can hand the vehicle back.
What else do I need to know?
The customer can voluntarily terminate their credit agreement before the final payment is due but as set out in the credit agreement, the customer will be required to either hand back the vehicle or pay at least half of the total amount owed.
Repayment periods can vary from 12-60 months, the choice is yours.
The car must not be more than 10 years old at the end of the agreement period and the minimum loan amount is £1,500.
As a ‘regulated’ finance agreement, this product is not available to corporate entities, e.g. limited companies.
Finance provided by Key Motor Finance on behalf of Santander Consumer (UK) plc, subject to status, terms and conditions. Applicants must be 18 or over. Guarantee/indemnity may be required.