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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Back to Finance Products Explained

Jigsaw Finance Limited is a credit broker and not a lender. We can introduce you to a limited number of lenders and their finance products. We are not an independent financial advisor; we will provide details of products available, but no advice or recommendation will be made. You must decide whether the finance product is right for you.

We will receive a commission payment from the lender/finance provider if you decide to enter into an agreement with them. The commission payment received is for the introduction and work in facilitating and arranging the finance for you and is a one-off payment from the lender to Jigsaw. The calculation of this commission is based either on a fixed fee or a percentage of the amount you borrow, this is determined and may vary by the commercial agreement Jigsaw has with the lender. We may work with just one lender or a limited selection of lenders when arranging finance. As a Credit Broker, we may also have other commercial arrangements with a lender which do not influence the terms of your finance agreement. We may share some of this commission with the motor retailer.

The amount of commission will be made available to you before signing your finance documents.

All the lenders that we work with pay commissions at different rates, however, the commission received does not affect the amount you will pay under your finance agreement. Our aim is to secure finance for you at the lowest interest rate available from our panel of lenders. Finance may be available from other providers outside of our panel, and you should consider your options before entering into an agreement, we are not able to provide impartial recommendation.