Hire Purchase Agreements Explained

Understanding our vehicle finance

Hire Purchase is finance that’s secured against a product, in this case a vehicle, and it doesn’t belong to you until you’ve paid in full.

When you take out Hire Purchase you will make fixed monthly payments (the same each month) over an agreed amount of time, e.g. £150 every month for 3 years.

 

Representative 38.9% APR, First Response Finance

A longer contract means smaller monthly payments but the total amount to pay back will be higher due to more interest.

You can reduce the amount you borrow if you pay a deposit however this is not required

Please note: some information on this page will inform you of legal requirements of a Hire Purchase agreement and some will be First Response Finance’s own policies.

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Hire Purchase Vehicle Finance

Hire Purchase Pros & Cons

Pros
  • Simple to arrange
  • Fixed monthly payments
  • Fixed interest rates
  • Flexible term lengths 18-60 months
  • Vehicle belongs to you after final payment
  • Deposits not required
  • No annual mileage restrictions
  • You are protected under the Consumer Rights Act 2015
Cons
  • The vehicle is at risk of repossession if you do not keep up repayments
  • You do not own the vehicle until your final payment
  • Hire Purchase is not suitable if you plan on paying off your loan within 6 months
  • Finance is subject to status and not guaranteed

If you're interested in finance make sure you read our application process to understand how your application will be dealt with.

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Our process

Below you can see an overview of how our finance application process works.

The full process may be longer/shorter depending on your personal circumstances. Finance is subject to status.

Our customer process for hire purchase

  1. Apply using our online application form.
  2. We will text/email you to arrange a call or we’ll invite you to create an account online
  3. We will have a chat about to see if we can help or you’ll be invited to confirm all details online
  4. We'll give you an idea of costs and what we can lend
  5. Find a vehicle
  6. We'll give you exact figures based on the vehicle you want to finance
  7. Documents will be sent to you/the dealership to read and sign
  8. We receive the documents back, pay the dealer and you can drive away!

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Payments

By comparing APRs on finance deals you can see which is cheaper as the APR takes into account all fees and money which will have to be paid back.

If you choose to compare deals in this way make sure you are comparing the same loan amount and the same loan term (e.g £5,000 over 36 months).

We advise you to choose a payment which is over the shortest term you can comfortably afford – choose between 24-60 months.

Hire Purchase Explained

Who owns the vehicle?

We do. You are the registered keeper and are responsible for insuring and maintaining it.

First Response are the legal owner until the amount you borrowed has been fully repaid.

It is illegal for you to sell the vehicle without permission.

Missed payments

We understand life can throw unforeseen circumstances, if this happens then please get in contact and be honest about your circumstances.

As a company we are flexible, accommodating, and we will always try to support and work with you through any difficult period.

If you miss payments we are legally able to repossess the vehicle.

We know this is not ideal and we would prefer to solve issues to ensure it doesn’t get to this stage.

If we do repossess the vehicle we would sell it at auction and use the money to repay your debt. If the money doesn’t cover the amount remaining you will still have to pay the money back plus any fees incurred.

Ending your contract

You have the right to voluntarily terminate the contract and give the vehicle back to us at any point.

You must pay, or have already paid, half the contractual repayments to do so.

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Why choose First Response Finance?

We look at most cases individually and will try to talk to you directly to discuss your loan needs, budget and your choice of vehicle.

By adding this personal touch we are able to get a better understanding of your needs and will be able to create the best deal possible for you.

Please be aware that we do automatically decline some customers where we believe our product would be further detriment to their personal finances.

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Independent advice

At First Response we believe our customers should be happy with everything before they sign their Hire Purchase agreement.

Where possible we will always encourage customers to seek independent advice on finance, debt or dealing with money.

Independent advice on finance

Information from Citizens Advice