A straightforward way to pay for your Van. You make an initial payment or use our 0% deposit option, then the balance is spread equally over a select number of years helping you to select instalments that match your budget. At the end of the agreement, once you have made all the payments you own your vehicle.
Voluntary termination, also referred to as the Half Rule, allows a customer to terminate the agreement & hand the vehicle back to the lender. To do this, half of the total amount repayable in the agreement must have been paid. This is the full price of the car plus the total interest in charges & fees. The vehicle must be in a reasonable condition for its age and mileage & any arrears will also have to be paid.
A HP agreement can be settled at any time by the customer by paying the balance of finance outstanding and Option to Purchase fee to the lender. The lender may allow the customer a rebate of the interest if the outstanding finance balance is settled before the agreement end date. If it is a HP agreement regulated by the FCA, then the minimum amount of rebate will be set out in the FCA's rules. You can make additional payments & receive a corresponding reduction in interest.
At the end of a HP agreement, once all the contracted payments have been made, the customer will usually pay the Option to Purchase fee and take the legal title to the goods. However, this is a true option. The customer could return the vehicle to the finance company.
You can pay a bigger deposit, meaning you borrow less. Or you can spread repayments over a longer period. However, doing this means you will pay more interest, so consider whether it's worth it.
If you miss a payment, it's likely the lender will contact you to see if you just 'forgot'. If you keep missing payments, it'll mark you 'in default'. Once this happens, it'll quite quickly take the car, as to leave it with you while it chases payments risks the car depreciating in value.
You can do this at any time. Unlike a standard personal loan, an HP doesn't have any fees if you want to pay off the entire loan early. Contact your lender and ask what the best way to do this is.
When you apply, the lender will do a credit check to decide whether to lend to you, and this check will appear on your file as an application for credit. Credit checks for HP aren't usually as stringent as those for personal loans. This is because the HP finance is secured on the car – if you don't pay, they can just come and repossess the car, whereas for loans there's no security, so they'd need to chase you through the courts.
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