As a growing number of motorists are returning their hire-purchase vehicles to the banks and finance houses under a little known loophole known as ‘the half-rule’ clause, the National Consumer Agency has advised members of the public to be careful in the way they execute the ‘half rule’ in order to protect their credit rating.

The practice, known in the trade as ‘jingle mail’, allows those who bought vehicles for private use under hire-purchase agreements, and who have repaid 50 per cent of the price, to return the car to the lender and walk away from the remaining repayments without damaging their credit ratings.

The ‘half-rule’ clause can be triggered under the 1946 Hire Purchase Act but, warns the National Consumer Agency, a key element is that it must be made very clear to the bank or finance company that it is not a ‘voluntary surrender’ and people should not sign surrender forms if presented to them. The return of the car under a properly administered ‘half rule’ clause is not recorded by the Irish Credit Bureau and does not affect credit history.

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