- Some HP agreements have a balloon payment at the end of which is normally higher than your usual monthly payments
- You do not legally own the item until after the final payment is made, but you do have full use of the item throughout the payment period
- You cannot legally sell the item until the agreement has been paid off
- If you do not keep up the repayments, the item can be seized
- You have the right to end the agreement at any time
Penalty fees for missed or late payments
Interest surcharge for missed repayments - this means an additional amount of interest will be charged on the amount unpaid
Completion fee for ownership of the goods to pass to you - sometimes you have to pay a balloon payment much higher than your usual monthly payments
Repossession charges - you could be charged for repossession costs or for failure to take reasonable care
Rescheduling charge - if your lender agrees to change the loan terms
- The item covered under the agreement, for example, a car or computer.
- The cash price of the item.
- The hire purchase price. This is the total amount you will pay over the life of the loan. The hire purchase price is the monthly payment or instalment multiplied by the number of instalments which you have to make.
- The amount of each instalment you have to pay. Sometimes the final instalment is much larger than all the others (a balloon payment).
- The date you must pay each instalment.
- The names and addresses of all the parties to the agreement.
A statement that you have the right to withdraw from the agreement within 10 days of receiving a copy of the agreement. This is known as a cooling off period. Often you are asked to give away this right by signing a waiver. You do not have to sign this waiver.
A statement that you must tell the owner (finance company) of the locations of the item.
The words “Hire Purchase Agreement” which must be stated clearly and in a prominent place on the agreement form.
The fees, charges, and penalties that apply.
The Annual Percentage Rate (APR) charged (for agreements made since May 16, 2022).