Car Hire Purchase

CityWalk_2

Can someone tell me how these work?

Can you just hand the car back at any stage during the agreement?

malestrom07

You can hand the car back after 50% of the agreement price has been paid and owe nothing.

If you hand it back before 50% is paid, the car will be sold and you could be liable for any "shortfall" for instance if the car does not fetch enough at sale price to clear the outstanding finance ....

CLAPTON

If it's HP then you can return the car after half the payments are made without any further payments being due.

see
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013226


With other finance depends upon the agreement; so if you take out a personal loan then it has nothing directly to do with the car so returning the car still means you owe the full amount.

Under NO circumstances believe the salemans ... ask for the full agreement and take it away and read all the T&Cs.

speedbird1973

If it's HP then you can return the car after half the payments are made without any further payments being due.


This isn't correct. As the poster before states you can return the car after half of the loan has been repayed. Not half of the repayments made (there is a big balloon payment at the end of the term which needs to be taken into account).

The paperwork will have a figure that needs to be repayed before you return the car. So you can confirm before you sign.

linda.b_4

Wish I'd asked this question 15 months ago! Be careful as you can't just hand the car back on some schemes. I got legged up by Mercedes when I got a smart car. It is £119 a month for 3 years and at the end either hand car back or pay balloon payment of £3.800. Fair enough I knew that. Clapton makes a good point in that you should not believe what crap the salesman tells you. I specifically asked "what would happen if I get fed up of the car in a year?" Salesman, "oh just bring it back, nothing to pay". I rang the other day for a settlement figure as I could do with a 4 seater. £2.500 to bring the car back!!! I will be about 32 months into the agreement before I can hand it back. Read all the terms and be sure what you are signing for. Dont do what I did and take the salesman word for it!

tupperware

malestrom07 wrote: »

If you hand it back before 50% is paid, the car will be sold and you could be liable for any "shortfall" for instance if the car does not fetch enough at sale price to clear the outstanding finance ....

This isn't quite true. If it is a HP agreement then the liability will be calculated by

Half way point of agreement - whatever the customer has paid so far

So if the customer has paid £1000 and can hand it back at £4000 they would be liable for £3000.

The sale price of the car is irrelevant.