HP - how big a deposit is too big?

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classcchap

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W205 C200 Sport Estate
Using HP necessarily involves a serious risk since, if you default, they can just take the car away. The degree of risk depends on the size of deposit - consider a deposit of £49,000, say, on a £50,000, if you default first payment you could be down close to £100,000!
O.k. so 98% is a bit extreme - but how big is too big - 25%, 50%?
 
Using HP necessarily involves a serious risk since, if you default, they can just take the car away. The degree of risk depends on the size of deposit - consider a deposit of £49,000, say, on a £50,000, if you default first payment you could be down close to £100,000!
O.k. so 98% is a bit extreme - but how big is too big - 25%, 50%?
Eh?
 
Correction: you’d be loosing your deposit - say £49,000. Sorry about that but it’s still a massive risk isn’t it?
Depends on how likely you think you are to default. I assume you wouldn't buy a £50k car with a £49k deposit or a £1k deposit if you thought it likely that you would default.

Assuming you keep the car for the full term of the finance agreement, at some point you will have paid £49k, and could still have a "massive" risk of defaulting.
 
May I ask OP why ask this question? Surely it depends on how much you can afford or how big a deposit the finance company is willing to accept.

By the way, if you have £49k, don't throw all of that in finance, buy a car under £49k. :D
 
May I ask OP why ask this question?/QUOTE]
Public interest ph47mf. For most hp there is no established market for the goods - kitchens, clothes, carpets and such like - so the finance house doesn’t use them as surety and you can safely use any deposit you like. Not so car hp, because there is a working used car market they can - and do - take your car as surety. This makes large deposits very risky and I’ve never seen it discussed. Public interest see, let’s talk about it.
 
May I ask OP why ask this question? :D

Sorry about all this - I’m having finger trouble with a new browser.

Hopefully you can see my reply though.
 

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