HP & Car Finance: Your Rights
Hire Purchase agreements are one of the most complained-about financial products in Ireland. Here's what the law actually says.
What is Hire Purchase?
A Hire Purchase (HP) agreement is a credit agreement where you hire goods (usually a car) and pay in instalments. You don't own the goods until the final payment is made. This is different from a personal loan where you own the car outright.
HP agreements in Ireland are governed by the Consumer Credit Act 1995. This gives you specific rights that the finance company and dealer may not tell you about.
Your Right to Cancel (Cooling-Off Period)
Under the Consumer Credit Act 1995, you have a 10-day cooling-off period from the date you receive the signed copy of the HP agreement. During this period, you can cancel the agreement without penalty.
Critical:The 10 days start from when you receive the signed agreement, not when you signed it or took delivery of the car. If the dealer didn't give you a copy of the signed agreement, the cooling-off period may not have started.
Voluntary Termination (The 50% Rule)
Under Section 63 of the Consumer Credit Act 1995, you can voluntarily terminate an HP agreement once you have paid (or tendered) 50% of the total HP price. The total HP price includes:
- The cash price of the vehicle
- All interest and charges
- Any deposit paid
Key point:Once you've paid 50%, you can return the car and walk away with no further liability, provided the car is in reasonable condition. The finance company cannot refuse this — it's your statutory right.
Dealer vs Finance Company — Who's Responsible?
This is where many people get confused. In an HP transaction, there are two separate relationships:
- The dealer sold you the car — they have obligations under consumer protection law regarding the quality and condition of the vehicle
- The finance company financed the car — they are the legal owner until you make the final payment, and they are responsible for the HP agreement terms
If the car is faulty, both the dealer AND the finance company may be liable. The finance company often claims it's “nothing to do with them” — this is frequently wrong.
Common Problems
HP applied without your consent
If a dealer arranged HP finance without your knowledge or consent, this is potentially fraud. Send a SAR to the finance company to get the application records — if your signature was forged, file with the Gardaí and the FSPO.
Wrong vehicle financed
If the vehicle registration or details on the HP agreement don't match the car you're driving, this is a serious error. The HP agreement may be void.
CCR entry you didn't authorise
If HP appears on your CCR and you didn't agree to it, file a CCR amendment and send a SAR. The finance company must prove you consented.
Early settlement disputes
You have the right to settle an HP agreement early. The finance company must provide a settlement figure that fairly rebates unearned interest. If the figure seems too high, challenge it.
How to Fight Back
- Send a SAR to the finance company — get the application, agreement, internal notes, and CCR submission records
- Check your CCR report — verify the HP is reported accurately
- File a formal complaint with the finance company (starts the 40-day FRL clock)
- File a CCR amendment if the data is wrong
- File an FSPO complaint once you have the FRL (or 40 days pass)
- File a DPC complaint if there are data protection breaches