My wife is buying a new car. The salesman is telling us that we can take out a finance deal that ends up making us about 700 quid better off. Hmmm...
It works like this: we take out a loan for £5000 over 2.5 years, and they knock £1000 off the price of the car for our troubles. We start paying back the loan (with 7%pa flat rate interest) but after 6 months we pay up the balance and the car is ours. The net benefit to us is over £700.
We just got a copy of the hire purchase agreement to read the small print. As expected, there is absolutely no mention of early repayment of the balance. Nor is there any mention of the £1000 price reduction, so that seems to be unrelated to the hire purchase contract.
Does anyone know if there are any global rules governing hire purchase agreements, especially rleating to early repayment of the balance? Given that we have not signed anything regarding the £1000 price reduction, can the garage (or their finance company) try to claw-back any of this money if we pay up early?
Thanks, Nick.