Remedies of a Hirer in a Hire Purchase Agreement
When it comes to purchasing a high-priced item, such as a car or home appliance, a hire purchase agreement can be a convenient way to spread the cost over time. This type of agreement allows you to take possession of the item immediately, with the understanding that you`ll make regular payments until you`ve paid it off completely.
However, there are times when a hirer may run into financial difficulties and struggle to keep up with payments. In such cases, it`s important to understand the remedies available to you under the terms of the hire purchase agreement. Let`s take a closer look at some of the options.
1. Refinancing the agreement
If you find that you`re struggling to keep up with payments, one option is to renegotiate the terms of the agreement with the finance company. This may involve extending the length of the agreement or reducing the monthly payments to make them more manageable. You`ll need to speak with the finance company directly to discuss your options.
2. Voluntary termination
Under certain circumstances, you may be entitled to terminate the hire purchase agreement early. This is known as voluntary termination, and it allows you to return the item to the finance company without having to pay the full balance outstanding. However, there are a number of conditions that must be met in order to qualify for voluntary termination, so it`s important to read the agreement carefully.
3. Repossession
If you`re unable to keep up with payments and don`t qualify for voluntary termination, the finance company may take steps to repossess the item. This means that they`ll take possession of the item and sell it to recover the outstanding balance of the agreement. However, the finance company must follow certain procedures when repossessing the item, and you may still be liable for any outstanding balance once the item has been sold.
4. Rescheduling payments
In some cases, the finance company may be willing to reschedule your payments to make them more manageable. This may involve a temporary reduction in the monthly payments, or a payment holiday where you`re not required to make payments for a set period of time. Again, you`ll need to speak with the finance company directly to discuss your options.
In conclusion, a hire purchase agreement can be a convenient way to purchase high-priced items over time, but it`s important to understand the remedies available to you if you run into financial difficulties. By being aware of your options and communicating with the finance company, you can find a solution that works for both parties.