Car hire purchase in Nigeria is an opportunity for you to own your own car via installment payments when you don’t have a lump sum to pay for it outrightly. You don’t have to go through the hassle of jumping buses. Get all the information you need in this post, from hire purchase contract to list of car financing companies in Nigeria!
Many Nigerians yearn to own a car of their own, but paying fully for one is a luxury most of them can’t afford in this economy. Leading an active life requires mobility. If you have a regular job or run a business, you can’t shy away from moving around. So, what do you do if you don’t have a lump sum to buy a car of your own? Keep walking or jumping buses? Car hire purchase in Nigeria saves you the trouble.
Jumping from one bus to another is an added stress to the already stressful life in the country. The long wait at the bus stop and inconvenience on the bus are reducing your productivity. Naijauto.com brings you all you need to know about getting a car of your own via hire purchase.
1. What is car hire purchase?
Called installment plan in places like India,hire purchase is simply a process whereby you purchase a car with the option of paying in installments over a stipulated period of time.
The history of this closed-end leasing (a.k.a) rent to own dates back to the 19th century in the UK. People who had low credit and couldn’t afford certain expenses were given the opportunity to acquire the items instead of forfeiting them. As long as they could pay a deposit, they’d sign a contract that allowed them to take the item and pay for it monthly.
Due to the expensive prices of cars, hire purchase has become a common practice across the world. Even when you don’t have a lump sum to pay for a car, it’s made available to you. But technically, you can’t lay 100% claim to it until you pay the total price. As a buyer, it’s important to note that the seller has the right to repossess the car if you are unable to make payment as agreed in the contract.
2. Car hire purchase contract and car hire purchase agreements
2.1. Car hire purchase contract
Hire purchase is guided by a formal contract signed by both parties – the seller and the buyer. The document must be in writing and signed by both of them before it can be considered valid under the law. Each item or clause of the contract must be spelt out. Anything that isn’t contained in the document, isn’t part of the contract.
Make sure you know what to include in the car hire purchase contract!
Some information included in the hire purchase contract include:
Description of the car
The seller and buyer may be aware of the property in question, but it has to be well described for clarity. It’s explained to erase any doubts or assumptions by either party, and for the information of third parties.
Price for the car
Every hire purchase contract must include the amount of money to be paid for the property. In this context, the total car price is clearly stated.
Deposit for the car
The buyer isn’t required to pay the total price for the car at once, but he/she must make a deposit. This shows their commitment to acquire the car. Amount to be deposited is clearly written in the hire purchase contract.
The installment plan is mutually agreed upon and stated in the contract. Being the owner of the car, the seller issues a payment plan, and deliberates on it with the buyer. Interest rate for the payment is also stated in the instalment plan.
Statement of parties’ rights
Like every legally recognized contract, both parties in the hire purchase have rights. Such rights can be exercised according to the provision of the contract signed. The terms are clearly stated in order to protect their individual interests. Top on the list, is the right to pull out of the contract for valid reasons.
2.2. Car hire purchase agreements
A hire purchase contract is based on agreements by the parties involved. Key components of the agreement include:
The buyer doesn’t have full ownership of the car until he/she makes full payment. The former is the registered owner while the latter remains the legal owner as long as the transaction is incomplete.
Terms and conditions of the agreement are created by the issuing party or broker. The buyer must be willing to abide by their conditions to be eligible.
Having made half payment of the agreed price, the buyer can return the car without making any more payments, if he/she is no longer interested in the hire purchase.
With a third of the total price paid, the lender loses the right to repossess the car from the buyer forcefully without getting a court order in that regard.
Check the terms carefully before putting down your name!
3. Car financing in Nigeria - Everything you need for car hire purchase in Nigeria
3.1. Hire purchase loan
Hire purchase loans can be obtained from designated or specialized financial institutions in Nigeria. Such a loan given to customers is the commercial hire purchase also known as corporate hire purchase.
Commercial hire purchase (CHP) enables you to acquire a car by making monthly installment payments while you make use of the car for the purpose intended. The lender makes a commitment to acquire the car on your behalf, afterwards, hires it to you for an agreed period of time.
3.2. Hire purchase interest rate
Interest rate is a major factor to consider in a hire purchase transaction. Given that you aren’t making full payment at once, such an option comes with interest to the seller.
Interest rates for hire purchase differ based on the car type and loan issuer. However, the rates are better for new cars. If you are going forused cars for sale, you need to be very careful about the interest rate because there might be hidden problems in the car that will incur expenses.
3.3. Car financing services
Are you looking for reliable places for car financing in Nigeria? Naijauto has some suggestions here. However, before you come to these services, make sure you have researched thoroughly about installment plans or anything related to save time and effort while working with them.
If you are from 28 to 45 years old, then you are eligible for this company financing program. Also, you must have a Class-D license and 5-year driving experience.
The company has its branches spread over Nigeria, from Port Harcourt to Benin with different contacts, so we put here the contacts of its Head Office in Victoria Island.
Phone number: 08091780815 or 09068749097
Address: 180B Moshood Olugbani street, off Ligali Ayorinde street
Crediville Limited provides financial scheme for hire purchase customers
Stanbic IBTC Bank
The Stanbic IBTC Bank offers finance solutions to both individuals and enterprises in Nigeria. They promise a flexible payment contract of up to 4-year instalment.
You can also get access to their massive dealer network to find your ideal car.
When coming to Diamond Bank for an instalment payment, you will know exactly how much you have to pay with clear-cut terms and interest rates.
You can ask for N1 million up to N20 million to pay for maximum 70% of your brand new car. This means you must get 30% payment ready in your hand before visiting this bank.
Phone number: 07003000000
Email address: email@example.com
4. Hire purchase companies in Nigeria
With a little skill of searching for information on the Internet, you can easily find names and addresses of hire purchase companies in Nigeria. Particularly, search engines can also filter the list based on your location. In case you don’t have enough time, refer to the following companies suggested by our readers.
Though we can list out their contacts here, we do not ensure their service quality, so you had better visit their offices directly.
4.1. Car hire purchase in Abuja
Lecon Financial Services Limited
Contact: +23496708714 or +23498700853
Address: 256, Zone AO, off Herbert Macaulay Way, behind Unity Bank building, Central Business district, Abuja FCT
Abuja gathers a lot of car hire purchase services
Beeshop Logistics Car Rental/Hire services
Address: Plot 215 Ademola Adetokunbo Cres, Wuse II, Abuja
Car Hire Service
Address: Nnamdi Azikiwe International Airport, Abuja
Commercial bus driving is a common business in Nigeria. With a high population consisting of people who aren’t mobile, there’s a market for transportation. Individuals and institutions make buses available to drivers for operations. Depending on the agreement reached, the drivers remit certain amounts to the owners.
Putting buses on hire purchase is a thriving transportation business in Nigeria. Commercial drivers acquire buses from their owners after paying a deposit, and make the remaining payment in instalments as they work.
Not just cars, you can hire purchase buses or even Keke in Nigeria
A hire purchase bus contract is mutually beneficial to both parties. The buyer has the liberty to work with the bus on their own terms as long as he/she keeps to the agreement, and the seller doesn’t have to worry about the cost of operation or damages.
Owning your own car doesn’t have to be a dream for so long. With car hire purchase in Nigeria, you can make it a reality. Look out for the right deal, and grab it while you can. When your car arrives, feel free to visit Naijauto.com for all information about car maintenance and safe driving.