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Getting the full benefit from the car hire purchase 'half rule'


Take the keys.

I have just found out about the 'half rule' relating to hire purchase car loans. I have paid more than half of my car loan so far and from what I have read online, it seems that I can use this law to return my car without any legal issue.

I am struggling to reach my repayments and I think this option could be the best for me if it is correct. I just want to know if this solution would affect my credit rating and how exactly it works.

Kind regards,


Siobhán says: The 'half rule' allows you to end a hire purchase agreement on the condition that you pay half the hire purchase price of the car. The documentation that you received from the bank or finance company on entering the agreement must show the amount required.

If you decide to take the 'half rule' option you should write to the finance company or bank and inform them that you want to return the car using the half rule. It is important that you do this in writing, rather than verbally. Also, clearly specify that you want to return the car using the half rule. Do not sign a voluntary surrender form. We have a sample 'half rule' termination letter on our site, www.consumerhelp.ie.

You should also check the condition of the car and take detailed pictures of the interior and exterior before returning. This will help protect you from liability if the car gets damaged after you return it.

Return the car yourself. Otherwise you may be charged a collection fee.

The 'half rule' is seen as early termination of your agreement and will be recorded as such on your credit report.

To find out more, please visit www.consumerhelp.ie/carfinance. I hope this is helpful.

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Got a question for siobhan? showe@independent.ie

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