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HP Does it make sense?


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Just now, daveat92 said:

I have no idea of the OP's financial status, but the fact that they are talking about a loan means they are not cash rich. What happens should they become unable to work or some other unfortunate occurrence?

 

 

They asked for comments on HP, not a lecture on their financial responsibilities.  With the greatest respect, their financial commitments are personal and have nothing to do with others opinions.

2018 Volvo V90 and 2018 Swift Sprite Quattro EB

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55 minutes ago, GaryB1969 said:

With the greatest respect, their financial commitments are personal and have nothing to do with others opinions.

 

They do when others opinions are being sought, such as in this case.

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The choice for you is simply a matter of opinion. If you need a loan for the purchase, then a bank loan will normally be cheaper and you will own the caravan from the start. If you are offered 0% interest though HP might be the cheaper option. I did get that with the car, on checking what the bank could offer me, the HP was the cheaper although not by a lot.

If you do decide to change the caravan within the loan period you will have to pay an early exit fee with HP, whereas with a personal loan you can probably adjust it without any penalty. That may also attract you.

You have to weigh up the pros and cons for you including the additional protection HP would give you if things go wrong to decide. Having said that, if you pay the deposit on a credit card you get the same financial protection as if you had used HP, so the personal loan then looks a better option in most cases. 

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1 hour ago, Wildwood said:

If you do decide to change the caravan within the loan period you will have to pay an early exit fee with HP, whereas with a personal loan you can probably adjust it without any penalty. That may also attract you.

 

Utter rubbish all loans to consumers whether that is a Personal Loan or HP, early settlement is calculated the same using the Actuarial Formula.

 

The Actuarial Formula replaced the Rule of 78 many years ago.

 

Jaguar E-Pace 180D HSE R Dynamic - 2008 Swift Conqueror 540

 

"Unless otherwise stated, my posts will be my personal thoughts and have the same standing as any other member of Caravan Talk"

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The point is though that with a personal loan you may not need to go for early settlement. Most lenders will allow you to roll it into another if you fit the lending criteria. You also can just leave it running if you can afford to do so.

HP companies will also give you a lower settlement figure if you replace the loan with another from them in most cases, but if the caravan is written off, the insurer will normally pay the full settlement figure to clear it. On replacement as new policies the HP provider will normally be willing to transfer the loan to the new model.

 

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5 hours ago, Wildwood said:

The point is though that with a personal loan you may not need to go for early settlement. Most lenders will allow you to roll it into another if you fit the lending criteria. You also can just leave it running if you can afford to do so.

HP companies will also give you a lower settlement figure if you replace the loan with another from them in most cases, but if the caravan is written off, the insurer will normally pay the full settlement figure to clear it. On replacement as new policies the HP provider will normally be willing to transfer the loan to the new model.

 


Early settlement on both a Personal Loan and HP allow the lender to charge up to 58 days interest in compensation to them for you settling the agreement early.

Jaguar E-Pace 180D HSE R Dynamic - 2008 Swift Conqueror 540

 

"Unless otherwise stated, my posts will be my personal thoughts and have the same standing as any other member of Caravan Talk"

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Loans are a great way of getting what you want and enjoy  as long as you consider the implications. We live for now not tomorrow and I'd simply take out a bank loan at 2.8% as the Halifax keep offering me or is it the TSB. 

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  • 4 months later...

Just to resurrect this thread. Iv had a quote for a 21k 2019 van, 3K deposit at 5.4% APR over 10 years hire purchase for £190 a month which was a little better than I was expecting. That’s only if they clear us for that percentage rate. I’m not going ahead with a new van purchase till end of next season now but it was good to get a ball park figure. It’s also comforting to know that if anything goes wrong then we have much more clout with the dealer being on HP. It’s looking more likely that this is the route we will go down once we pay off our personal loan for a car.

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  • 3 months later...

Just to put an end to this topic, just bought a 2017 Sterling Elite privately for a steal considering current prices. I ended up going for a 5 year personal loan at 4.3% APR and it’s worked out pretty affordable. Went to visit some brand new swift’s in a dealer and I was gobsmacked at the variation in build quality, some were ok, some were shocking. 

Prices were absurd so pretty happy getting a genuine private sale all be it sadly from a widow who’s husband had passed away recently after buying it.

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The only time we used HP (or Hire Purchase:lol:) is if the interest rate is either none existent or very, very low.  And the way interest on savings is at the moment, its definitely not worth it at the moment.  What me and OH would sometimes do (although not now) is use credit cards with no interest rate for a certain amount of time, and when it was coming to a halt, we would go for another CC with no interest rate, until loan was finished.  But I think its harder now to do

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