Car Hire Purchase

Car Hire Purchase is one of the most common ways people buy a car. It is a type of secured loan attached to the ownership of the vehicle based on a fixed length of time. Once you have paid the total amount in regular payments and you’ve paid any ‘option to purchase’ fee that may be required, you will own the vehicle. This is a great opportunity for people to own a car that they wouldn’t have been able to afford outright.

However, it also means that if you miss payments, the lender is allowed to take the vehicle back. They will have to issue a default notice before they do this and will usually try to contact you for about 3 months before they take action to repossess the goods.

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What to do if you are struggling to pay for your Car Hire Purchase

Speak to your car finance provider to let them know. It is always better to be honest with them, rather than default on your payments and harm your credit score.

They may be able to reduce the payments and extend the period of the loan or allow you to defer for a short period of time.

If you’ve already paid back 50% of the loan, plus interest and fees, then you should be able to hand the car back to the company and voluntarily terminate the contract. However, you will lose the money you have already paid, even if you have paid more than 50% of the loan.

How can a Debt Management Plan help you with Car Hire Purchase debt?

Here at DFH we understand how important a car may be for your work and family commitments. Therefore, if you’re struggling with car finance debt get in touch with us today and we’ll do our best to work out a debt management plan that allows you to maintain ownership of your vehicle. Additionally, we could potentially stop your lenders from contacting you, and freeze the interest rates on your debt. Reach out to us for help today and begin your journey to financial freedom.

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