Hire Purchase - UK Question

[An_S_4_Me]

Hi,

I bought my MINI 18 months ago on a hire purchase agreement, When I went in to sort out the credit, I told them I didn't want to have a large final payment, and just wanted to pay for the car over the years, which they did for me, I was happy with this, but have recently come into some money, Can I pay up remaining amount on the agreement?

Cheers
Andy

[jasonfields007]

Hi Andy,

If it's with BMW finance, you can call them for an up-to-date settlement figure. They're very good with stuff like that.

J

[wrenny]

You can also call your dealer who will do the same. I cleared my wife's finance a few months ago.

The only "con" will be that you will pay upto two months interest. This is a penalty and is written into the consumer credit act.

You can shout a few expetives down the phone though which will match or exceed this value .......



Happy new year

[dietcokeplease]

You definitely need to contact your finance company and ask for a settlement figure. Some contracts I've come across in the past have been heavily loaded. For example (simplified): You borrow £10k over 3 years and interest is £3k (£1k pa) - total cost of credit. After one year you want to settle. With some companies they are still entitled to the whole amount of interest (ie £2k) but may discount the figure for early settlement by £100. In this case you may as well stick your money in a bank and continue the agreement.

In any case make sure that you obtain a letter of satisfaction and check Equifax/Experian a few months later to show that the loan has been paid off/satisfied.

[Goonery]

BMW Finance are reasonable people, as you've paid a deposit, and made regular payements for more then 12 months, the settlement will probably be only your outstanding balance, there would'nt be an early settlement fee as you have been paying for over half the time of the agreement. You should call and ask for an early settlement quotation, ask if time is a factor, you might get a better deal by deferring until say 20 months are up.

[jasonfields007]

i agree with goonery. you can ask them for a settlement figure for 6 months time or something like that.

[KenL]

Find out how much they want and compare it to putting the money in a good bank account. You might be better off that way as they may not just let you pay the remaining capital but some of the interest as well.

Check the small print on the agreement as well, the conditions might be there.

[wrenny]

you will be fine as I said earlier. BMW finance are ok.

adios