What Happens if I Don’t Pay Hire Purchase?

Hire Purchase is most commonly used to buy cars; however, some businesses will use it to purchase expensive equipment. As long as you consistently make your repayments, once your payment term has ended, you will own the item outright.  


But, if you continually miss payments, then the consequences can be severe. Here are the steps your lender is likely to take:

  1. Payment Reminder- in the first instance, if you miss a payment, then you will receive either a phone call or a letter telling you to make the missed payment.
  2. Arrears Notice – If you miss a second payment, then you will most likely receive an Arrears Notice stating how far behind you are and how much you need to pay to catch back up. This needs to be sent to you no less than every six months until you catch up or your lender has obtained a court order.
  3. Default Notice – if things continue to be problematic, then you could receive a Default Notice, which gives you 14 days to clear the debt.
  4. Termination of the Finance Agreement – If you fail to clear the arrears within the 14 days, then the agreement can be cancelled. This means you either need to clear the debt in full or return the car or goods you originally purchased.
  5. If you don’t’ comply with this, the lender can begin proceedings to have the car or equipment repossessed.


To find out more, take a look at our Hire Purchase Debt page

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