Under a conditional sale, which statement is true about termination?

Study for the Specialist Automotive Finance Test. Use flashcards and multiple-choice questions with detailed explanations to get exam ready!

In a conditional sale, the seller (lender) owns the car until all payments are made, but the buyer can use and keep the car while meeting the terms. If the buyer defaults, the contract can be terminated by the lender, and the car can be repossessed. When terminating early, there’s typically a settlement option: the buyer can either return the car or pay a lump sum to end the agreement. Paying about half of the total amount owed is a common settlement figure that ends the contract without further liability. This reflects a practical middle ground: it stops further payments and avoids the costs of repossession, while the seller recoups a meaningful portion of what was promised. So the statement that termination is possible, with the choice to hand back the car or pay half the total owed, best captures how termination works under a conditional sale.