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• Library > Legal Subjects > Banking and Financial Law > Buying on Hire-Purchase

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WHO SHOULD ENSURE THAT THE GOODS UNDER A HIRE PURCHASE AGREEMENT ARE BEING INSURED ?

The finance company shall at the expense of the hirer, cause the goods to be insured in the name of the hirer

• motor vehicle for the first year only
• all other goods for the duration of time that the goods remain under hire purchase

against any risk that the finance company thinks fit.

Where the goods is a motor vehicle in respect of the hiring period immediately following the first year, the hirer shall at his or her expense, cause the goods to be insured in the name of the hirer.

A hirer shall not less than 14 days before the date of expiry of a policy of insurance in respect of motor vehicle, inform the finance company that he or she has renewed the said policy.

Where the hirer has failed to renew the policy of insurance, the finance company shall be at liberty to cause the motor vehicle to be insured and any costs thereby incurred shall be borne by the hirer.

A finance company cannot request the hirer to insure any risks with any particular registered insurer.

WHAT CAN BE DONE IF THE NOTICE OR DOCUMENTS REQUIRED TO BE SERVED ON THE HIRER CANNOT BE SERVED PERSONALLY OR BY MAIL ?

Under the Hire Purchase Act 1967 Section 47A, where it appears that it is impracticable for any reason to serve a notice or document required or authorized to be served on a hirer,

• by delivering it to him personally or
• by posting it by registered post addressed to him at his last known place of abode or business,

a court of a Magistrate may, on application by the finance company make an order for substituted service of the notice or document.

An application for an order for substituted service must be made by notice supported by an affidavit stating the facts on which the application is founded.

Substituted service of the notice or document is effected by taking such steps as the court may direct to bring the notice or document to the attention of the person to be served, which is usually by advertisement in local newspaper.