In the UK Jason has specifically asked about what would happen if a customer purchased a car on credit and then decides they want to terminate the contract, or they fail to make payments. You have been given the following hypothetical scenario to help explain the situation for Jason:

A customer buys a car under a hire purchase agreement for a total HP cost (including all interest) of 8000. This is made up of 2000 deposit and 24 monthly payments of 250. The company receives a letter from the customer explaining that he has lost his job and wishes to terminate the contract. Make notes about what the customer would need to pay if:

a) He terminates after three instalments before the fourth one is due

b) He has paid four instalments and the fifth and six are owing

c) He has paid twelve instalments and the thirteenth is owing but the car has been badly damaged in an accident.

Discuss the rights of borrowers and lenders and give an opinion on the balance of rights and responsibilities of the two parties?