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Hire purchase

MaggyB · 2018-12-09 10:21:12

Hi All We are planning to buy a brand new car next year and are currently looking at all options bank loan, PCP and hire purchase. We have pretty much ruled PCP because we don’t want the balloon payment hanging over us at the end. Car loan from the bank we fully understand everything about this option. For hire purchase we…

09-12-2018 10:21am

#1

MaggyB

Registered Users, Registered Users 2 Posts: 25 ✭

Join Date: May 2016

Posts: 12

Hi All

We are planning to buy a brand new car next year and are currently looking at all options bank loan, PCP and hire purchase.

We have pretty much ruled PCP because we don’t want the balloon payment hanging over us at the end.

Car loan from the bank we fully understand everything about this option.

For hire purchase we are unsure of a few things and hope some of you can share some insights on the below. The APR is much lower than the bank loan option so want to ensure we don’t leave ourselves open to any potential pitfalls should we go with this option and the unthinkable happens in an accident/robbery.

- if the car is written off/stolen within the 3 year agreement, what happens? Does the insurance company pay the finance company directly and this leave us potentially still owing the difference along no replacement car? We would be planning to put over 30% of the cost forward as a deposit when buying.

- what happens if the garage bank (VW bank) goes bust would the lenders take back the car?

We are planning to ask the garage these questions next week too but wanted to have some information in advance.

Thanks in advance!

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