Money

Kevin Milne: Look closer at your car dealers contract

Wise up before you commit to lending terms and you’ll keep debt from becoming an insurmountable burden.

By Kevin Milne

*We bought a car from a dealer on a hire purchase deal. When we got home we looked closer at the contract and realised we’d have difficulty making the repayments.As the hire purchase agreement said we had a three-day cooling off period, we decided to return the car and call off the deal. But the dealer said even if we didn’t go ahead with the hire purchase deal we still had to buy the car. We think he’s trying to con us.*

Sadly, he’s right. He’s not trying to con you. The “cooling off” provisions apply only to the hire purchase agreement.

It’s good that you have recognised you wouldn’t be able to make the repayments as per that particular contract. But now you have to find another way to finance the car.

Maybe the hire purchase firm can reorganise the contract to suit you better? Maybe the car dealer could do a deal on a slightly cheaper car.

If you have a good relationship with a bank, I would take the papers there and see if they can do you a cheaper loan. Usually they can.

But you will have to show them that you have a reliable income and that your pay goes through the bank. I hope you didn’t forget to cancel the hire purchase contract within the three days.

Until I looked into this, I also would have thought you could return the car, so thanks for raising a very important issue around credit contracts.

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