Hire-purchase Deposits.

[G6Tanuki]

In the context of the parallel-running "Purchase Tax" thread I thought you might be interested in the following, taken from "Hansard" 25 March 1969.

It relates to the required up-front deposit and the time-allowed-to-pay-off-the-rest for cars and - of greater relevance - Televisions - in the immediate post-WWII period:

" I have a schedule setting out the effect of hire-purchase controls since 1958. First of all, to deal with cars. I begin in 1958, because at that time there were no restrictions. In 1960 the minimum down payment was 15% increased to 20 per cent. In 1965 it went up to 25 per cent.; in 1966 it went up to 40 per cent. In June, 1967, it was reduced to 30 per cent. and in August, 1967, it was reduced to 25 per cent. In November, 1967, it went up to 33⅓ per cent. The order I mentioned at the beginning of my speech increased the down payment on cars to 40 per cent. At the same time the repayment period was subject to fluctuating regulations.

Starting in 1958 there were no restrictions. In 1960 a maximum repayment period of two years was imposed. In 1961 that went up to three years and then in 1965 it was cut to two and a half. In February, 1966, it was cut further, to two and a quarter years and in July, 1966, it was cut again to two years. In June, 1967, it went up to 2½; in August, 1967, it was extended to 3; but in November, 1967—this is three changes in one year—it was cut to 2¼ years. Finally, it was cut back to two years.

I could quote similar instances of fluctuations, but I will not weary the House with a detailed list of the goods subjected to orders. However, I should like to quote one other instance—television sets. In 1958, there was no minimum deposit. In 1960 the deposit was made 20 per cent. In 1962 it went down to 10 per cent.; 1965, up to 15; February, 1966, up to 25; July, 1966, up to 33⅓; 1967, down to 25; and 1968, up to 33⅓per cent. The repayment period varied from 2 years, up to 3, down to 2½, down to 2, up to 2½ and down to 2. With all these fluctuations, it must be very difficult for any manufacturer to plan his production ahead on a rational basis."


The effect of all these changes was that sometimes manufacturers/dealers were faced with a warehouse full of stuff they couldn't shift because the HP charges had been put up - then when they'd adjusted to the lower demand the Government would free-up credit and the manufacturers then couldn't ramp-up production fast enough to meet the sudden increase in demand.

I seem to recall that there was at one point a similar Government requirement for someone renting a TV to make an initial 'deposit' of some specified multiple of the monthly rental-charge - and that this amount was similarly varied by a stroke of the Chancellor's quill causing the same stop-go situation in rental demand.

[Alan Stepney]

You are correct, it did apply to rental deposits too.
The constant changes were one reason that Philips, for whom I worked, closed down all their rental and retail outlets.

[colly0410]

When did the HP minimum deposit, minimum/maximum payment shenanigans end?

[Radio Wrangler]

When bank loans and credit cards became commodities.

They separated the financial terms from the nature of what it was being spent on.

By the way, I remember when some mandarin decided that open reel tape should be 10% for the tape (because that was a bare 'medium' like paper) and 25% for the spool it came on (because that became a part of the tape recorder and they were luxuries!)

Things were getting towards tape being supplied as a pancake in a cardboard box and spools separately when it all changed again.

Based on their track record, I anticipate new silliness regarding tax on electricity for different uses.

David