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Hire Purchase Act 1965 (UK)
3 key takeaways
Copy link to section- The Act governs hire purchase agreements, ensuring consumer protection in the UK.
- It sets out the rights and obligations of both the lender and the borrower.
- The Act requires specific information to be disclosed to the consumer before signing the agreement.
What is the Hire Purchase Act 1965 (UK)?
Copy link to sectionThe Hire Purchase Act 1965 is a legislative framework designed to regulate hire purchase agreements in the United Kingdom. Hire purchase agreements allow consumers to obtain goods by paying an initial deposit followed by regular installments, with ownership of the goods transferring to the buyer after the final payment is made. The Act was introduced to ensure transparency and fairness in these transactions, protecting consumers from unfair practices.
The Act lays out the legal requirements for hire purchase agreements, stipulating the necessary information that must be disclosed to consumers, such as the total cost of the goods, the installment amounts, and the duration of the agreement. It also outlines the rights and responsibilities of both the lender and the borrower, ensuring that both parties are aware of their obligations.
Key provisions of the Hire Purchase Act 1965
Copy link to sectionThe Hire Purchase Act 1965 includes several key provisions designed to protect consumers and regulate the hire purchase market. One important aspect is the requirement for all hire purchase agreements to be in writing and to clearly state the terms and conditions. This ensures that consumers are fully informed about the details of the agreement before committing.
Another significant provision is the right of the consumer to terminate the agreement early. Under the Act, consumers have the option to return the goods and cancel the agreement, subject to certain conditions. This right provides consumers with a level of flexibility and protection if their circumstances change or if they are dissatisfied with the goods.
The Act also mandates that any repossession of goods by the lender must be conducted lawfully and that consumers are given adequate notice before any action is taken. This protects consumers from sudden and unfair repossession practices, allowing them time to address any issues with their payments.
Impact on consumers and lenders
Copy link to sectionFor consumers, the Hire Purchase Act 1965 offers significant protection and peace of mind when entering into hire purchase agreements. By ensuring that all terms are clearly laid out and that consumers have the right to terminate the agreement, the Act helps to create a fair and transparent market.
Lenders, on the other hand, are required to comply with the provisions of the Act, ensuring that their practices are fair and transparent. This compliance helps to build trust between lenders and consumers, promoting a healthy financial market.
Amendments and related legislation
Copy link to sectionOver the years, the Hire Purchase Act 1965 has been subject to various amendments to keep up with changes in the market and consumer protection standards. These amendments have enhanced the original provisions of the Act, ensuring that it remains relevant and effective in protecting consumers.
Related legislation includes the Consumer Credit Act 1974, which further regulates credit agreements and offers additional protections for consumers. Together, these laws provide a comprehensive framework for consumer protection in the UK financial market.
Related topics
Copy link to section- Consumer Credit Act 1974
- Hire purchase agreements
- Consumer protection laws
- Financial regulations in the UK
Explore these related topics to gain a deeper understanding of consumer rights and financial regulations in the UK.
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Sources & references

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