Conditional Sale with a balloon
Commercial Vehicle
Simply explained
This short video provides a simple explanation of Conditional Sale with a balloon and how it works.
What is it?
Enjoy lower monthly payments with Conditional Sale with a balloon and pay the remaining balance at the end. You own the vehicle at the end of the agreement.
How it works
- Your monthly payments are lower because you pay the remaining balance at the end. This final ‘balloon’ payment is based on the vehicle’s estimated value at the end of the agreement.
- Your finance quotation will include the balloon payment.
- To meet your needs and budget, you choose how long the agreement runs for and the deposit (if any) you put down.
- After paying any deposit, you pay monthly and then pay the balloon at the end of the agreement.
Why it could be right for you
- Pay lower monthly instalments, compared to our Conditional Sale product.
- Fixed interest rate. So, after paying any deposit, you pay the same amount each month for the whole agreement (excluding the final payment). This covers the amount you borrowed and interest.
More you should know
- The agreement is secured against the vehicle. If you miss your repayments, we may need to take steps to recover the outstanding balance, which could include repossession of the vehicle. Ownership of the vehicle will be transferred to you once all payments under the agreement have been completed.
- You can’t return the vehicle at the end of the agreement.
- Once all payments under the agreement have been made, including the balloon payment, you become the owner of the vehicle.
- You are required to pay the balloon payment.
- If you’re a limited company, PLC or limited partnership, we can’t offer you this agreement.
This type of agreement is covered by the Consumer Credit Act 1974, which means:
- You can pay off lump sum amounts during the agreement.
- You can settle the agreement early by repaying the required amount.
- You have the right to terminate the agreement early through Voluntary Termination.