Hire Purchase- paying a deposit and then monthly , fixed installments


	Hire Purchase- paying a deposit and then monthly , fixed installements
	Advantages Customers can have a newer, higher specification car than they could/want to buy outright The cost is spread over a period of time and paid by fixed monthly instalments that will not increase – even if bank interest rates rise, this makes budgeting easy You own the vehicle once your final instalment has been paid, compared to leasing the vehicle	Disadvantages The loan is secured against the vehicle: The vehicle can be repossessed if payments are not kept up. Non-payment can negatively affect your credit rating The finance company are the legal owners of the vehicle until the agreement is paid in full Repayments will include interest charges, and the car will overall cost more than a cash purchase.
	Evaluation

Customers can have a newer, higher specification car than they could/want to buy outright
The cost is spread over a period of time and paid by fixed monthly instalments that will not increase – even if bank interest rates rise, this makes budgeting easy
You own the vehicle once your final instalment has been paid, compared to leasing the vehicle

The loan is secured against the vehicle: The vehicle can be repossessed if payments are not kept up.
Non-payment can negatively affect your credit rating
The finance company are the legal owners of the vehicle until the agreement is paid in full
Repayments will include interest charges, and the car will overall cost more than a cash purchase.

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