You can rent items such as cars or electrical goods. A rental agreement means you can use the item as long as you pay a regular fee and keep to the terms of the agreement. Each agreement can have very different terms and it is important to check them all before you sign a rental agreement.

The most common types of rental agreement are:

• Personal contract purchase (PCP). This is a common form of car finance. You pay a deposit and then monthly payments and a larger ‘balloon payment’ at the end. You have the option of making the balloon payment and keeping the car, handing it back at no cost, or exchanging it for a new vehicle;
• Lease purchase. This is similar to PCP, but without the option to return the car at the end of the agreement;
• Personal contract hire. This is the simplest form of rental. You make the monthly payments over a fixed period and then hand the item back at the end.

With all types of rental agreement the creditor owns the goods and you cannot sell them.

if you do not keep to the terms of a rental agreement there may be penalties to pay. For example, if you end the agreement early, or you damage the goods or you have excessive mileage in the case of cars.

If you cannot afford to pay the rental agreement, the item will be repossessed.

If you have to make a complaint about a rental agreement, contact the creditor themselves first.

Rental companies must have a consumer credit licence to trade, so if your complaint is not resolved within eight weeks, it can be referred to the Financial Ombudsman Service.

The Finance and Leasing Association is the main trade body of the industry in the UK. They publish a code of practice and you can raise a complaint with them about one of their members.