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Step 1.4

Hire Purchase

• You may have bought your car through a hire purchase agreement.
• Check your agreement.
• With hire purchase you do not own the car until you have paid the last installment.
• If you fall behind with your payments the creditor may be able to repossess the car.
• If you have paid more than one third of the total owing the creditor cannot repossess the car unless they obtain a court order. They cannot just come and repossess the car.
• If you have paid half of the contractual payments and you have looked after the car, you can usually return it without further payments.
• If it is important to you to keep the car e.g. you need the car for work, you may need to include the payments on the expenditure section of your personal budget and treat this as a priority and not a credit debt. Be prepared to explain to creditors why you need to retain the car.

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