Second thoughts on hire purchase

P

pennywise

Guest
Hi All

This is my first post so bear with me.

I arranged a HP Car Loan with my bank last week - 15k over 4 years at 365 p/m.

My own car died unexpectedly and I needed to sort things out asap. I'm now wondering if I wasn't a bit too hasty in going with HP instead of a personal loan.

Also, I've since got a gift of €3000 that I would love to put against the car.

I presume this is not an option with HP.

Should I go back to the bank and ask to scrap the HP deal and take out a loan for 12k ?

Thanks

pennywise
 
If the original poster has signed up is there any cooling off period governing HP agreements that could be used to get out?
 
ClubMan said:
If the original poster has signed up is there any cooling off period governing HP agreements that could be used to get out?
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There's normally a 10-day cooling off period but as with loans, you can waive your right to the cooling off period if you want the finance to come through immediately.
 
you would have had to waive the right to the cooling off period to get the car that day. I would suggest you ring the HP company and check how much it would cost to clear the HP (a settlement figure). When working this out they should give you an interest rebate - some of the interest back. As it's so early in the agreement you should get most of it back but the calculation used means you will probably owe something - you can then arrange a bank loan to clear the debt. it will costs you nothing to get the figures from the HP company then at least you're in a better position to make a decision.
 
Thrifty said:
you would have had to waive the right to the cooling off period to get the car that day. I would suggest you ring the HP company and check how much it would cost to clear the HP (a settlement figure). When working this out they should give you an interest rebate - some of the interest back. As it's so early in the agreement you should get most of it back but the calculation used means you will probably owe something - you can then arrange a bank loan to clear the debt. it will costs you nothing to get the figures from the HP company then at least you're in a better position to make a decision.
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Exactly right. Have you actually signed the finance agreement yet? If so contact the bank and see what they can do. You wont be due to make your first payment for a month so depending on who you get on the phone they make come to an arrangement to cancel the HP and let you take out a personal loan with them. Not very likely but possible.

If not like Thrifty said get a settlement figure and take it from there, settlements are calculated under Rule of 78 which afaik entitles you to a 5% rebate on interest payable over the entire period of the loan.
 
If you are with permanent TSb finance they allow you to make over payments. The rate will probably be better with HP than with a bank loan. The only real down side is that you cannot sell the car until all of the HP finance is paid off.
 
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