Car hire purchase is one of the easiest ways to finance a car; you pay a low deposit and then pay monthly instalments the option to buy it at the end of your contract. It does mean that you do not own the vehicle, until the last payment has been made. However car hire purchase deals are now one of the most complained about policies in Britain, Ombudsman figures show.
A rise in complaints logged with the Financial Ombudsman follows after the amount of money being borrowed to buy new cars rose to more than 30billion this has trebled over the past eight years. The Ombudsman report for 2015 – 2016 shows the number of complaints about car hire purchases rose from 1,511 to 1,784 which is an 18% increase. This year’s report published by the Ombudsman shows that in the last year, complaints rose from 1,784 to 3,072which is a 73% increase. Making car hire purchase the third most complained about consumer credit product just behind payday loans and credit agency reports.
Under hire purchase agreements which now account for 9 out of 10 car sales, drivers can be offered loans which are worth more than their own salaries.
The Ombudsman said the largest proportion of complaints relating to car hire purchase were categorised as being related to the “return of goods” and a spokesman added that complaints in this category complaints include where someone wishes to return the vehicle because they believe it has a defect. The second most complained issue was categorised as “administration” and these complaints include errors with the administration with the account e.g. incorrect payment amounts being taken or someone’s credit file not being amended.
The city watchdog amid suggestion that drivers should be made to pass mortgage-style affordability test before been able to lease a new car, this is to stop the irresponsible car hire purchase deals so people will be able to afford there finance and not get into debt.
Here at Connect we can insure both owned and hire purchase vehicles so why don’t you see if you can save on your insurance by clicking here or you can call us direct on 01782 280280