From: Ronald Raygun 
Subject: Re: Hire Purchase
Newsgroups: uk.finance
Date: Tue, 14 Dec 2004 14:02:25 GMT

clett wrote:

> Hello All
> 
> My husband parked the car on top of a wall on his way home last night and
> we're now waiting for the Insurance company to pass judgement on whether
> or
> not it's repairable or a write off.  There are still 14 months left to go
> on a 4 year Hire Purchase agreement.
> 
> Can anyone tell me please, if the car is written off, will we have to pay
> what is left on the HP agreement (eg 14 x the monthly payment) as a lump
> sum, or are the HP company likely to make a reduction in the interest, and
> give us a quote for a lower lump sum to close the agreement?

Ask them.  I'd think you always retain the option of not paying them a
lump sum at all, but just carry on paying 14 monthly payments.  If paying
off a lump sum, I'd expect the total would be reduced by only between 6.6%
and 9% of the total interest which would have been payable on the whole 4
year loan.

Alternatively, use the situation as a bargaining lever.  Remember, they
will be keen to get your business for your next car.