Conditional Sale is a purchase agreement between the finance company and the customer, where the customer agrees to buy specific goods e.g. a vehicle.
Conditional Sale agreements are very similar to Hire Purchase, but they are different products. The key difference is that in entering a Conditional Sale agreement the customer commits to becoming the legal owner of the vehicle, once all repayments have been made to the lender. Under Hire Purchase, the customer has a genuine choice on whether to take legal title at the end. Balloon payments are also used under Conditional Sale agreements.
Conditional Sale is a form of tri-partite transaction usually available to both private and business customers.
Conditional sale agreements can be regulated, exempt or unregulated under consumer credit regulation. This all depends on the type of customer, the amount borrowed and the purpose of the lending.