Hire Purchase Agreements Explained

Understanding our vehicle finance

Hire Purchase is finance that’s secured against a product, in this case a vehicle. Secured simply means that the vehicle doesn’t belong to you until all the money is repaid.

When you take out Hire Purchase you will make fixed monthly payments (this means they are the same each month) over an agreed amount of time, for example £150 every month for 3 years. 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 Pros & Cons

Pros
  • Simple to arrange
  • Fixed monthly payments
  • Fixed interest rates
  • Flexible term lengths 24-60 months
  • Most vehicles HPI checked
  • Vehicle belongs to you after final payment
Cons
  • The vehicle belongs to us until you pay your final payment
  • If you don't keep up your repayments your vehicle is at risk of being repossessed
  • Not suitable if you are planning on paying off your loan within a short period of time.

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

Our process

Below you can see an overview of how our finance application process works. Please be aware that this is a top level process which means 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 find the best time to call you
  3. We will call you and have a chat about what you’re looking for and see if we can help (around 10-15 minutes)
  4. We'll give you a rough quote so you have an idea of costs and what we can lend
  5. Find a vehicle and let us know the details
  6. We'll do a full quote for you which is the exact figures you'll pay and is based on the vehicle you want to finance
  7. Documents will be sent to you/the dealership for you to read and sign
  8. We receive the documents back, pay the dealer and you can drive away!

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. We can agree your repayment term over any number of months from 24 to 60 months allowing us to adjust to your specific requirements.

If you have already chosen a vehicle all you have to do is agree the monthly repayments over your chosen term.  If you are still looking for a vehicle then we can help by recommending motor dealers in your local area who we have dealt with in the past.

Who owns the vehicle?

We do. You are the ‘registered keeper’ of the vehicle and are responsible for insuring and maintaining it but First Response are the legal owner until the amount you borrowed has been fully repaid. You are not allowed to sell or dispose of the vehicle without our permission, if you do you’ll be committing a criminal offence.

When all the repayments have been made we will automatically transfer ownership of the vehicle to you.

Missed payments

We understand life can throw unforeseen circumstances and this may cause you to struggle making the repayments. 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 will always try to help you and get in touch beforehand as 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 we get 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. Under these circumstances you must pay, or have already paid, half the contractual repayments. It is usually the most desirable thing to do if you no longer require the vehicle or you are no longer able to afford it.

Why choose First Response Finance?

First Response are number 1 on Review Centre

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.

First Response Hire Purchase for vehicles

Please be aware that we do automatically decline some customers where we believe our product would be further detriment to their personal finances. As a responsible lender we will not lend to any customer where our product will cause financial stress. 

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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. 

Read information on different finance options by click the button below. This website was set up by the government to ensure consumers have as much knowledge about their options before agreeing to a finance agreement.

Independent advice on finance

Further advice is also available from The Citizens Advice Bureau. Here you will find information on debt, different types of borrowing and more general Hire Purchase information.

Information from Citizens Advice