Can I end a Hire Purchase agreement early?

ace_case

I'm paying on Hire Purchase for my car and I'm coming up to one year in.

I know that I can end the agreement and hand the car back after I've paid 50% (that will be next year), but I really want to get rid of the car this year and take a new deal so that I can have free insurance/tax/breakdown again.

So basically, can I pay off the hire purchase? I got a fantastic deal (family work for Vauxhall) when I bought the car and it's private sale value is now about the same, if not a little more, than what I owe on the agreement.

Is it possible to pay off a HP agreement early, so that I actually own the vehicle and can then sell it, or are there usually extortionate fees for doing this?

The HP is with GMAC and is for 3 years with a balloon payment at the end.

If anyone knows anything about these agreements, I'd be grateful of the help!!

LisaN_2

Yes the company should let you settle the agreement early at any time. They will quote you a settlement amount, which will be all of the capital outstanding (including your balloon) plus the interest, which will be discounted because you're settling early. In my experience it is not usual to charge any fee for this, however you should check with GMAC to be sure.

An important point to note - they will require you to settle the agreement before you sell the car - this is important because they have title to the vehicle until you settle them in full (i.e. they are effectively the legal owner). If you sold the car before paying off the agreement, you would effectively be in default and this may show up on your credit searches.

Hope this helps - enjoy the new car

nomoneytoday

As long as the buyer is happy to make the cheque payable to GMAC for the outstanding balance its not a big problem

Gorgeous_George

Don't some HP companies insist that all the interest is paid (for the full term)?

You just need to ask them. Don't suppose you want to buy me a TwinTop?



GG