Hire Purchase

These are hire agreements offered by shops or garages so that you can hire and eventually buy particular items. Items bought on HP are normally expensive items such as a car or furniture or electronic equipment. You do not own the item until the last instalment of the loan is paid. Sometimes the last instalment is called a ‘balloon payment’ which is a larger payment than any of the other instalments. Be sure that you can pay off this final amount before your take up this finance. Hire purchase finance is not flexible
The store or garage offering the loan is called a credit intermediary. This means that they operate as an agent for a finance company. While the Financial Regulator regulates finance companies, the National Consumer Agency regulates credit intermediaries (as well as pawnbrokers).
There is a difference between a consumer hire agreement and a hire purchase agreement which is very important. In a hire purchase agreement ownership of the items passes to you after the last installment is paid. In a consumer hire agreement the goods are hired and will always belong to the consumer hire company.