Hire-Purchase Agreement for a Vehicle (India) by OLL
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Agreement for Hire-Purchase of a Car through a Finance Company
THIS AGREEMENT made at.................. this................... day of............. 200_
between
A S/o...........
R/o...................
(Hereinafter called the owner) of the FIRST PART
and
BS/o.......
R/o...................
(Hereinafter called the hirer) of the SECOND PART and
C S/o..........
R/o...................
(Hereinafter called the dealer) of the THIRD PART.
WHEREAS the hirer is desirous to purchase a car and he has approached the dealer to sell the car to him and to arrange the finance for the purchase of the car.
AND WHEREAS the dealer after satisfying about the creditworthiness of the hirer, has requested the owner to purchase the car more particularly described in the Schedule hereto (hereinafter called the said car), in order to let the same to the hirer under a hire-purchase agreement.
AND WHEREAS the owner has acquired the said car from the dealer for the abovementioned purpose and in consideration of the above, the dealer has agreed to guarantee the payment of the hire by the hirer in accordance with the terms of hire-purchase agreement.
WHEREBY IT IS AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. The owner shall let and the hirer will take on hire the car more particularly described in the Schedule on the following terms and conditions.
2. The hirer shall pay to the owner on the execution of these presents for the option to purchase herein contained the sum of Rs............ and for which credit will be given if the said car be purchased in accordance with the terms of this agreement and will pay to the owner at his address for the time being and without demand the sum of Rs............ every calendar month by way of rent for the hire of the said car, the first payment to be made on the......... day of............. and each subsequent payment on the 10th day of every succeeding month.
3. The hirer during the continuance of the hiring, will not sell, assign, pledge, mortgage, underlet, lend or part with the possession of the said car or otherwise deal with the said car and will not take the same out of the city of............. without the previous consent in writing of the owner.
4. The hirer during the continuance of the hiring shall keep the said car in good repair condition and working order (reasonable wear and tear excepted) and will permit the owner, his servants or agents to have access to the said car for the purpose of inspecting the condition thereof. The hirer shall pay all licence fees, road tax, fees and duties payable in respect of the said car.
5. The said car shall be insured by the hirer in the joint names of the owner and the hirer against loss or damage by fire, accident, third party risks and riot risks in the sum of Rs............. with the Insurance Company Ltd. and the hirer shall pay punctually the premiums and all moneys payable in respect of such insurance.
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This template provides a framework for a tripartite hire-purchase agreement involving an owner, a hirer, and a dealer/guarantor. It outlines the terms for renting a motor vehicle with an option to purchase, including payment schedules, maintenance responsibilities, insurance requirements, and repossession rights in case of default.
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About this template
What is this template?
This document is a tripartite hire-purchase contract where the owner retains legal title to a vehicle while the hirer pays in installments. It is not a standard loan agreement because ownership only transfers after the final payment is made, and it includes a specific guarantee from the vehicle dealer.
When should you use it?
Use this template when a car dealer is facilitating third-party financing and is required to guarantee the buyer's creditworthiness. Use a standard Sale of Goods agreement instead if the vehicle price is being paid in full at the time of delivery.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 2 | Hire-Purchase Terms | The hirer pays an initial sum for the purchase option and subsequent monthly rent payments on the 10th day of every month. |
| 3 | Restrictions on Hire | The hirer is prohibited from selling, pledging, or moving the car out of a specific city without written consent from the owner. |
| 5 | Insurance Obligations | The hirer must insure the car in joint names against fire, accident, and third-party risks with a named Insurance Company. |
| 7 | Owner's Right to Terminate | The owner may seize the vehicle without notice if the hirer defaults on payments for a specified number of days. |
| 10 | Collateral Security | The hirer and guarantor must execute a promissory note for the total hire amount as collateral for the finance arrangement. |
| 14 | Transfer of Ownership | Ownership remains with the owner until the hirer completes all monthly rent payments and the purchase option fee. |
| 16 | Surety Guarantee | The surety guarantees all payments and performance of conditions, even if the owner grants the hirer an extension of time. |
Who it's for
- an individual in India purchasing a car through a dealer-arranged finance facility
- a finance company providing hire-purchase credit for motor vehicles
- a vehicle dealer acting as a guarantor for a customer's finance arrangement
How long it runs and how it's signed
Law it's drafted under
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