Very much like Personal Contract Purchase on a car, this fixed rate Hire Purchase agreement has lower than usual repayments because of the final balloon payment. At the end there are three options to either keep the machine, trade it in against a replacement or return it.
A fixed rate Hire Purchase agreement with lower than usual repayments because of the final balloon payment. In effect this balloon payment represents a significant proportion of the capital that remains unpaid until the end of the agreement. The end of term balloon payment is deliberately set below the estimate of the machine’s future trade value so that this final payment is more affordable whilst making it easier to select a number of flexible options:
*Subject to the machine being returned in an acceptable condition as set out in the addendum and with hourage within the original contracted hourage band. Excess hourage will be charged at a cost per hour figure as stipulated in the agreement.