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Outright purchase or Hire Purchase?
A friend is looking for a small cheap new car. They usually buy a new or pre-reg car costing around £6k car outright, but are being tempted by hire-purchase deals being offered on, say, a £7k car where the manufacturer offers a sizeable deposit contribution to entice the buyer into taking out their finance package.
If my friend took out the manufacturer's finance package (to receive the deposit contribution), is there any 'tie-in' for the full 36 month term that would stop him repaying the full amount outstanding a few weeks into the agreement in order to save on interest charges and to own the car outright?
If my friend took out the manufacturer's finance package (to receive the deposit contribution), is there any 'tie-in' for the full 36 month term that would stop him repaying the full amount outstanding a few weeks into the agreement in order to save on interest charges and to own the car outright?
Asked on 21 March 2016 by romford4
Answered by
Honest John
If it's HP, no. He can pay off half the loan and return the car. If it's a PCP, then he's tied to the PCP contract, and the offer you describe is most likely to be a PCP.
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