Can bailiffs take my car if it is on HP?
Bailiffs can only take goods that belong to you. This means they cannot take goods on HP agreements because they still belong to the lender. Find out more about what bailiffs can take.
Can I sell goods on hire purchase?
Goods on HP do not belong to you until you have made the last payment.
This means they are not yours to sell.
You would be breaking the law if you did this, and the creditor could take criminal action against you.
Vehicles on HP are all recorded on a database called the HP Index which anyone can check before they buy a vehicle.
Some dealerships offer a service which help you pay off the remaining finance on the HP. This means:
- You can exit the contract legally, and
- Sell to the dealer
If you are unsure about this, please contact us for impartial advice.
What are hire purchase balloon payments?
Some HP vehicle agreements have a large ‘balloon’ payment at the end. The balloon payment means the regular monthly payments will be lower.
- No balloon payment: £5,000 over 4 years is 48 monthly payments of £104.17
- With a balloon payment: £5,000 over 4 years could be 47 monthly payments of £85.17 and a final payment of £1,000
The benefits of a balloon payment are:
- If you have paid more than half of what you agreed to pay: You will usually have nothing more to pay if you end the agreement
- If you have paid less than half of the agreement: There will be a ‘shortfall’ to pay after you have ended the agreement
- This will be half of the amount you agreed to pay minus what you have already paid
- There may be some extra charges if the goods are damaged
- The regular monthly payments are lower
- If you do not want to keep the vehicle, you can return it instead of paying the balloon payment and there will be nothing more to pay
If you want to keep the vehicle, you will need to pay the balloon payment. Try to save up towards this before the agreement ends.
Your HP provider may let you pay the balloon payment in instalments rather than trying to take back the vehicle.