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      12-25-2012, 05:43 PM   #24
Major General
gIzzE's Avatar
United Kingdom

Drives: Merc E350 cgi Estate + RR TDV8
Join Date: Apr 2006
Location: Norfolk, UK.

iTrader: (2)

Hire Purchase is PCP.

Hire purchase is a lease purchase agreement, but under individual terms rather than business terms.

Contract Hire is simply rental, a different thing completely.

One thing to remember is that the 50% rule is 50% of total amount due, not total amount borrowed, catches many folk out.

By that I mean, if you buy a car for 35000 and borrow 30000 over 48 months with a final payment of 7000 with an apr of 9% you will actually borrow 37,000.

That is the 30k you have borrowed plus the interest over 4 years of 6997.

Your 50% point will be when you owe 50% of the 30,000 you have borrowed, however, getting to 15000 is not half way through. because you have to add interest on, now the interest is added monthly, so the whole 7k is not front loaded, but it is not when you have paid 15k.

It will take around 3 years to get to the 50% mark.

Now, the loan company can not log a negative against you if you end it early, but it will show on your credit report, and other lenders do see it.
Some may be bothered about it, many will simply consider it bad lending in the first place.