Common Profiles

Conditional Sale normally involves a fixed interest rate and fixed period of repayments, similar to a Hire Purchase contract.

The customer agrees to make regular payments to the finance company and should keep the vehicle fully insured and in roadworthy condition.

There are no mileage restrictions for customers. However, lenders may impose certain restrictions on the use and location of the vehicle. For example, the customer may be prohibitied from taking the vehicle outside the EU.

Deposit

A deposit is normally optional but the lender may set either a minimum or maximum amount. It can be paid with cash or by using any part-exchange equity from an old vehicle.

Where the lender has not specified a minimum amount, the customer can decide how much of an initial deposit to put down.

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Fees

The lender may charge an arrangement fee that can be paid at the start of the agreement or included as part of regular repayments for the term of the agreement. The fee amount is set by the lender.

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Regular monthly payments including interest

Customers pay off the amount borrowed (the balance) plus interest in monthly instalments over an agreed period of time (usually up to 5 years).

At the end of the agreement and when all payments have been made, title to the vehicle automatically passes to the customer.

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Balloon payment

It is possible to include a balloon payment (lump-sum) in the agreement, which the customer would be required to pay at the end of the term. However, this is uncommon.

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