{"id":369,"date":"2017-01-20T14:19:11","date_gmt":"2017-01-20T14:19:11","guid":{"rendered":"https:\/\/www.ccpc.ie\/consumers\/?page_id=369"},"modified":"2024-09-06T09:44:52","modified_gmt":"2024-09-06T08:44:52","slug":"hire-purchase","status":"publish","type":"page","link":"https:\/\/ccpc.inventise.ie\/consumers\/money\/loans\/paying-for-your-car\/hire-purchase\/","title":{"rendered":"Hire purchase"},"content":{"rendered":"<p>Hire purchase (HP) is a type of credit, often available from car dealers. It can offer you the convenience of being able to sort out your finance and pick your car in the same place. Under a HP agreement, you hire the car, pay an agreed amount usually in monthly repayments, and become the legal owner of the car at the end of the agreement. The legal owner of the car is the finance company and you cannot sell the car without the finance company\u2019s permission.<br \/>\n<div class=\"vimeowrap\"><\/p>\n<div class=\"cookie_custom_notice\" style=\"width: 100%; height: 442px; background: #ddd; border: 1px solid #ccc; padding: 20px;\">\n<h4>Undercover Dealer &#8211; Hire Purchase Agreements<\/h4>\n<p>This video explains how Hire Purchase works when buying a car<\/p>\n<p><p><i>Please accept functional cookies to watch this video.<\/i><\/p>\n<p><!-- OneTrust Cookies Settings button start --><br \/>\n<a class=\"optanon-toggle-display custom-cookie-button\" style=\"padding: 10px; background: #3c763d; color: white; cursor: pointer;\">Change Cookie Settings<\/a><\/div>\n<p><iframe loading=\"lazy\" class=\"iframe\" style=\"text-align: left; float: left;\" frameborder=\"0\" height=\"442\" src=\"https:\/\/player.vimeo.com\/video\/1006860598?badge=0&amp;autopause=0&amp;player_id=0&amp;app_id=58479\"  width=\"785\"><\/iframe><br \/>\n<\/div><!--\/vimeowrap--><div class=\"clear\"><\/div><\/p>\n<div id=\"accordion-1\" class=\"accordion no-js\">\n\t\t\t\t\t<h3 role=\"button\" id=\"accordion-1-t1\" class=\"accordion-title js-accordion-controller\" aria-controls=\"accordion-1-c1\" aria-expanded=\"false\" tabindex=\"0\">\n\t\t\t\tHow does HP work?\t\t\t<\/h3>\n\t\t\n\t\t<div id=\"accordion-1-c1\" class=\"accordion-content\" aria-hidden=\"true\">\n\t\t\t<\/p>\n<p>When you use a HP agreement to buy a car, the car dealer sells the car to the finance company. The finance company then rents the car to you for an agreed period, usually for a set monthly repayment over several years. However, some HP agreements will have a balloon payment at the end of the agreement which is normally higher than your usual monthly repayments.<\/p>\n<p>During the agreement, you can use the car but the finance company actually owns it. They are the owner, and you are the hirer. The finance company may be able to repossess (take back) the car if you fall behind with your payments. At the end of the agreement, the finance company passes ownership of the car to you, provided you have made all the repayments.<\/p>\n<p><div class=\"toptip\"><\/p>\n<h3>Top Tip<\/h3>\n<p>You are the registered owner of the car for tax and insurance purposes even though you are not the legal owner of the car.<\/p>\n<p><\/div><\/p>\n<p><span style=\"font-size: 16px;\">As with other types of credit, when you take out a HP agreement, your finance company will send details of the repayments you make to a credit reference agency. Find out more about what information is shown in your <\/span><a style=\"font-size: 16px;\" href=\"\/consumers\/money\/loans\/your-credit-history\/\">credit history<\/a><span style=\"font-size: 16px;\">.<\/span><\/p>\n<p>\t\t<\/div>\n\n\t\t\n\t\t\t\t\t<h3 role=\"button\" id=\"accordion-1-t2\" class=\"accordion-title js-accordion-controller\" aria-controls=\"accordion-1-c2\" aria-expanded=\"false\" tabindex=\"0\">\n\t\t\t\tInterest and fees\t\t\t<\/h3>\n\t\t\n\t\t<div id=\"accordion-1-c2\" class=\"accordion-content\" aria-hidden=\"true\">\n\t\t\t<\/p>\n<p>The total amount you pay back to the finance company is called the total HP price. It is made up of:<\/p>\n<ul>\n<li>the cash price of the vehicle, plus<\/li>\n<li>interest, plus<\/li>\n<li>fees to set up and end the agreement<\/li>\n<\/ul>\n<p>The interest rate on HP agreements varies depending on the finance company. Given that the interest rate is fixed for the term of the agreement, you cannot usually increase your repayments each month if you wish to do so.<\/p>\n<p>As well as interest, there are fees which may be charged on a HP agreement, including:<\/p>\n<ul>\n<li><strong>Documentation fee<\/strong><br \/>\nThis is a fee for setting up the agreement. It can vary between \u20ac50 to \u20ac150.<\/li>\n<li><strong>Interest surcharge for missed repayments<\/strong><br \/>\nA higher rate of interest may be charged on any repayments you missed.<\/li>\n<li><strong>Penalty fee for missed repayments<\/strong><br \/>\nThis is charged for missed or late repayments, in addition to the interest surcharge. It is usually about \u20ac25.<\/li>\n<li><strong>Completion fee<\/strong><br \/>\nThis is a fee to end the agreement and to allow ownership of the goods to pass to you. It can vary between \u20ac50 and \u20ac75.<\/li>\n<li><strong>Repossession charge<\/strong><br \/>\nIf the finance company repossesses the car, you will be charged a fee, usually around \u20ac300.<\/li>\n<li><strong>Rescheduling charge<\/strong><br \/>\nIf your finance company agrees to change the terms of the agreement, you may be charged about \u20ac60-\u20ac70<\/li>\n<\/ul>\n<p>If you pay off your agreement early and keep the car, you may be entitled to a discount on the interest you have to pay. This is known as an \u2018interest rebate\u2019. But, if you pay off the agreement early, you will not save as much in interest as you might with other types of credit. This is because with a HP agreement it is up to the finance company to decide what interest rebate they will give you.<\/p>\n<p>When comparing your options, make sure you compare the total amount payable on a personal loan (cost of credit) with the total HP price (the original amount of finance, plus interest and fees). Use our\u00a0<a href=\"\/consumers\/financial-comparisons\/loan-comparison\/\">personal loan cost comparisons<\/a>\u00a0to help you.<\/p>\n<p>\t\t<\/div>\n\n\t\t\n\t\t\t\t\t<h3 role=\"button\" id=\"accordion-1-t3\" class=\"accordion-title js-accordion-controller\" aria-controls=\"accordion-1-c3\" aria-expanded=\"false\" tabindex=\"0\">\n\t\t\t\tIf you have problems making repayments\t\t\t<\/h3>\n\t\t\n\t\t<div id=\"accordion-1-c3\" class=\"accordion-content\" aria-hidden=\"true\">\n\t\t\t<\/p>\n<p>If you have problems making repayments on a HP agreement, there are options available to you, including:<\/p>\n<ul>\n<li>Returning the car under the half rule<\/li>\n<li>Voluntary surrender<\/li>\n<\/ul>\n<p>To learn more about these options, see our content on <a href=\"\/consumers\/cars\/problems-making-car-repayments\/\">problems making car repayments<\/a>.<\/p>\n<p>\t\t<\/div>\n\n\t\t\n\t\t\t\t\t<h3 role=\"button\" id=\"accordion-1-t4\" class=\"accordion-title js-accordion-controller\" aria-controls=\"accordion-1-c4\" aria-expanded=\"false\" tabindex=\"0\">\n\t\t\t\tWhat happens if your car is faulty?\t\t\t<\/h3>\n\t\t\n\t\t<div id=\"accordion-1-c4\" class=\"accordion-content\" aria-hidden=\"true\">\n\t\t\t<\/p>\n<p>When you buy goods, including cars from a car dealer, you have <a href=\"\/consumers\/shopping\/buying-goods\/buying-and-returning-goods\/\">consumer rights<\/a>. If you buy a car on HP and find a <a href=\"\/consumers\/shopping\/faulty-goods\/\">fault<\/a>, the finance company to whom you are making your monthly repayments are responsible for fixing the issue as they are the legal owners of the car. As a practical first step, you can\u00a0return to the dealer you bought the car from and ask them to fix it.<\/p>\n<p>If the finance company will not help you resolve the issue you can go through their complaints process and if necessary escalate it to the <a href=\"https:\/\/www.fspo.ie\/make-a-complaint\/\">Financial Services and Pensions Ombudsman<\/a>.<\/p>\n<p>\t\t<\/div>\n\n\t\t<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Many \u2018car finance loans\u2019 offered by garages and some lenders are actually hire purchase agreements. Find out more about how they work. <\/p>\n","protected":false},"author":113,"featured_media":0,"parent":838,"menu_order":84,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"tags":[10,177,176,8],"class_list":["post-369","page","type-page","status-publish","hentry","tag-cars","tag-hire-purchase","tag-hp","tag-money"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Hire purchase | Car Finance- CCPC<\/title>\n<meta name=\"description\" content=\"Many car finance agreements are actually hire purchase agreements. 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