Cancel something you bought on hire purchase

You can cancel and return something you’re paying off through hire purchase at any time, but you might owe money to the company you bought it from.

‘Hire purchase’ is a type of borrowing where you agree to pay instalments on an item but you don’t own the item until you’ve paid off the agreement. It’s often used for buying cars, furniture or white goods. If the agreement says you must buy the item at the end of the period, this is called ‘conditional sale’.

You might have other options if you’re struggling to keep up the payments such as paying a reduced amount over a longer period. Contact the company to discuss your situation.

If you owe money and you’re struggling to pay

You should speak to the organisations you owe money to – they might let you pay smaller amounts or take a break from payments.

Don’t ignore bills or letters about money you owe. Find out how to start dealing with your debt.

Getting a full refund

There are very limited circumstances when you can return the item and get a full refund. You must have signed up in the last 14 days and signed up in one of the following ways:

• online

• by phone

• in your home

• by mail order

You’ll still be within the ‘cooling-off period’ if this is the case, which means you can cancel without charge. Contact the company and tell them you’d like to cancel.

How much you’ll owe if you cancel

If you're not eligible for a refund, you might owe the company money if you cancel. 

If you’ve paid off less than half of the item, you legally only have to pay for half the cost of the item minus what you’ve already paid in instalments.

If you’ve paid off half the item or more, you legally don’t have to pay any more.

Example

You bought a £900 sofa on hire purchase. You agreed to pay for it over 2 years for £37.50 a month. After 6 months you decide you want to return it. Half the price of the sofa is £450 and you’ve paid £225 so far. Because you’ve paid less than half the item, you owe the company another £225.

Example

You bought a £600 washing machine on hire purchase. You agreed to pay for it over 2 years for £25 a month. After 1 year and 3 months you can’t keep up the payments and have to cancel the agreement. Since you’ve already paid for over half of the item, you don’t have to pay any more.

Call or write to the company - you can use our template letter to help you.

You’ll need to return the item or arrange with the company for it to be picked up.

If the company is trying to make you pay more

Contact the Citizens Advice consumer helpline for advice if the company is trying to make you pay more than you legally owe - a trained adviser can give you advice. Contact Consumerline if you're in Northern Ireland.

If the company wants to repossess your item

If you’ve missed payments but you want to keep your item, contact the company and ask to make a repayment plan. If they agree, a repayment plan will mean you can pay smaller amounts over a longer period of time.

The finance company should keep you up to date about their plan for repossessing your goods. They should also explain how delaying the repossession would affect your situation - for example, it’s likely to increase the debt you owe. 

If you feel your finance company hasn’t kept you up to date, you can complain to an ombudsman.

You can also check when finance companies can repossess vehicles and goods.

Further help

Contact the Citizens Advice consumer helpline on 0808 223 1133 if you need more help - a trained adviser can give you advice over the phone. You can also use an online form.

If you’re in Northern Ireland, contact Consumerline.