A hire purchase business
involves giving out a vehicle to another party on agreement that this
individual usually a driver will use it for commercial purposes in a bid to pay
for the total cost of the vehicle (with interest) in installments. The driver uses the vehicle
for passenger, goods or oil haulage and pays an agreed amount daily, weekly,
biweekly or monthly until he covers the cost stipulated by the agreement
between him and the investor. The time frame varies from vehicle to vehicle and
agreement to agreement but is usually between the range of 6months to 1year.
Investors in car and
motorcycle hire purchase business can make between 150% - 200% return on their
investment in a single deal. This comes from the interest that the driver pays
on the vehicle when paying back for the vehicle he uses. For instance, an Okada
goes for around 120,000 naira but most investor give it out on hire purchase between
#180,000 - #200,000.
in preparing to start your business. Salient
facts you need to put into consideration include; brand, model and cost of
vehicle to buy; what they would be used for and for how long they would be used
before you get back your money.
==> Choose Your Vehicle
Carefully
Carry out extensive research on the preferred vehicles used in the
commercial sector. Consider affordable ones to help design the payment plan in
a way to recoup your investment within the shortest time frame.
==> Get A Reliable Driver
Giving your vehicle to a unreliable person can give rise to problems and
challenges. Verify every information supplied by the driver such as his address
and family. Always insist on at least 3 guarantors.
==> Make Your Agreement
Solid
Ensure you cover all areas in your agreement. Don't leave out loopholes
that drivers may exploit to the detriment of your business. What happens when the
driver defaults, an accident or mechanical fault occurs (preventing the usage
of the vehicle) are part of the issues to be covered in the agreement signed by
both parties.
==> Design An Effective
Payment Plan
Come up with a feasible amount and easy payment method to help recover
your investment within the stipulated time.
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