Conditional Sale Explained

What is Conditional Sale?

A Conditional Sale (CS) agreement is similar to Hire Purchase (HP).

These are different from ordinary credit agreements because under CS and HP agreements you do not own the car until you have paid off the agreement.

The key difference between a CS and HP agreement is that you will become the legal owner of the vehicle, once all repayments have been made to the lender, where as on HP there will be an option to purchase fee at the end of the contract before you legally own the vehicle.

The finance is secured against the vehicle.

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Summary

Initial Payment / Deposit
You may be asked to pay an initial payment / deposit.
Fees
There is usually an arrangement fee charged by the lender that can be paid at the start of the agreement or included as part of regular repayments for the term of the agreement.
Restrictions
There are no mileage restrictions under a Conditional Sale, lenders may impose certain restrictions on the use and location of the vehicle and condition of the vehicle.
Ending the Agreement
The agreement can be settled at any time by paying the total balance outstanding to the lender. At the end of the agreement, once all repayments have been made, title to the vehicle passes to you.

Advantages of Conditional Sale

  • There is no option to purchase fee at the end of the agreement, so you would own the car once you've made all payments.
  • Flexible terms from 1-5 years (the longer the term, the more interest you will pay).

Disadvantages of Conditional Sale

  • Monthly payments are higher than for Personal Contract Purchase and Leasing deals.
  • You don't own the car until you make the final payment.
  • You cannot sell or modify the car over the contract term without the finance company's permission.
  • If you fail to keep up all your repayments, the finance company can repossess the car.
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Jigsaw Finance Limited and associated trading styles is a Credit Broker not a lender and is authorised and regulated by the Financial Conduct Authority (FRN 679612). We work with a limited panel of lenders, who may offer different interest rates and charges. We are only able to offer finance products from these providers. Our lender selection process is structured to balance lender efficiencies with customer approval rates. We operate on a non-advised basis, meaning we do not provide financial advice or make recommendations. Instead, we explain key features of available finance products, and you decide whether the product is suitable for you.

We do not charge you a fee for our service; instead we receive a commission payment from lenders for arranging finance on your behalf. The commission we receive may vary depending on the lender and product. The commission we receive from the lender and pay to the introducer impacts the amount you pay.

As a credit broker with a limited panel of preferred credit providers from whom we receive commission, Jigsaw is not impartial and we may be influenced by the amount of commission we earn. Although we receive commission from lenders, we aim to provide finance solutions that meet our customers' needs.

The amount earned by Jigsaw and the motor retailer including how it has been calculated will be disclosed prior to signing your agreement. Full details of this can be found in our Initial Disclosure Document.

If you have any questions about how we are paid or how we select lenders, please ask before proceeding.