Hire-Purchase Agreement for a Vehicle (India)
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.
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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About this template
What is this template?
This document is a hire-purchase contract for a motor vehicle specifically adapted for use in India. It is not a standard sale agreement because ownership does not pass to the buyer until the final payment is made. It contains specific clauses regarding vehicle inspection, insurance obligations, and the owner's right to repossess the asset upon default.
When should you use it?
Use this template when a buyer cannot pay the full price upfront and the seller or financier wishes to retain title as security until all installments are paid. Use a Vehicle Sale Agreement instead if the full price is paid immediately and title transfers at delivery.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Agreement for Hire | The Owner agrees to let and the Hirer agrees to hire the vehicle described in the Schedule from the date of the agreement. |
| 2 | Hire-Purchase Price | The Hirer must pay a specified down payment followed by equal monthly installments as detailed in the Schedule. |
| 4 | Insurance | The Hirer is required to keep the vehicle insured against fire, theft, and third-party risks during the hiring period. |
| 8 | Ownership | Ownership remains with the Owner until the Hirer exercises the option to purchase by paying all dues and a nominal fee. |
| 10 | Repossession | The Owner may terminate the agreement and retake possession of the vehicle if the Hirer defaults on any installment for 15 days. |
Who it's for
- an individual in India purchasing a vehicle from a seller via installments
- a vehicle owner providing credit-based sales to a buyer in the Indian market
- a finance company structuring a hire-purchase scheme for motor vehicles
How long it runs and how it's signed
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