What deposit options are available for hire purchase?

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

Multiple Choice

What deposit options are available for hire purchase?

In hire purchase, putting down a deposit reduces the amount you need to borrow and the overall cost of the agreement. The typical options for the deposit are either paying cash upfront or using the value of an old car as a deposit (a trade-in). This gives you flexibility: you can lower monthly payments by paying cash, or you can leverage an existing vehicle to cover part of the deposit. The other choices aren’t standard: some deals might be advertised with no deposit, but that isn’t the usual arrangement, and using only an old car as the deposit doesn’t acknowledge theCash option. So the best answer is that you can provide either a cash deposit or deposit the value of an old car.

In hire purchase, putting down a deposit reduces the amount you need to borrow and the overall cost of the agreement. The typical options for the deposit are either paying cash upfront or using the value of an old car as a deposit (a trade-in). This gives you flexibility: you can lower monthly payments by paying cash, or you can leverage an existing vehicle to cover part of the deposit. The other choices aren’t standard: some deals might be advertised with no deposit, but that isn’t the usual arrangement, and using only an old car as the deposit doesn’t acknowledge theCash option. So the best answer is that you can provide either a cash deposit or deposit the value of an old car.

More practice questions