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Hire Purchase Finance Explained

Car Finance Explained

We are not a third party provider or a finance broker, this means that when taking out a car finance agreement with us, it is actually with us, Go Car Credit and not a company you have never heard of.

hire-purchase

Hire Purchase is one of the most common types of finance, it is really simple – you hire the vehicle and make fixed monthly repayments until you have paid off all of the agreed finance. There are no surprises at the end of your agreement such as balloon payments or mileage restrictions. The entire car price is spread across your agreement term and once all monthly payments have been made the car becomes yours, making it one sensible option for borrowing.

Hire Purchase is a suitable form of car finance for people who struggle to get other forms of credit such as personal loans, people with bad credit as well as people who do not want to pay cash for a vehicle. It is a convenient way to pay for a vehicle based on budget and credit profile so you can get monthly payments which are affordable.

Hire Purchase is suitable where the cost of a large purchase (e.g. a motor vehicle) is required to be spread over a period of time, such as the period of anticipated use, and where you wish to retain ownership of the goods after the end of the agreement terms.

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budget-credit

It is also suitable where a fixed monthly repayment is required, with the certainty that it will not change during the term.

Hire Purchase agreement may not be suitable as a form of short term credit. If the intended period of use of the goods is significantly shorter than the agreement term (e.g. three months instead of three years).

Typically a deposit is not required but there are some circumstances when a deposit may be required. For example if your maximum loan amount is £7,000 and the vehicle’s asking price is £7,200 you would be required to pay a £200 deposit.

 

fixed-payments

The full amount you will have to pay for the vehicle is divided into fixed monthly repayments which are spread over your agreement term; this could be from 24-48 months dependent on your circumstances and chosen vehicle.

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