the dusty T-junction of the popular Magboro market in Ogun State that links to the Lagos-Ibadan Expressway lies a line of tricycles waiting for passengers.

The tricycle park comes alive more in the morning and night when residents are returning from the day’s work. The evening traffic is usually a rush hour as corporate vehicles compete for passage with commercial transporters.

That evening, on March 19, 2024, our correspondent met Kingsley Uche, a tricycle driver, just coming to join the long queue of others waiting to be boarded. As our correspondent approached, he used an already dirty handkerchief to wipe sweat mixed with dust off his face that had been tanned by the sun.

Uche, a native of Anambra state migrated to Lagos when he was 25 years old to learn the business of car spare parts. A few years later, he moved to the neighbouring Ogun to reduce the cost of living.

Now 32, Uche is making ends meet by commuting passengers in a tricycle he secured through a hire purchase agreement.

A hire purchase entails the owner of an expensive item selling it to another person with the agreement that the buyer will make a specified payment in instalments within a period. Typically, this agreement includes a clause stating that the buyer will become the owner of the vehicle upon completion of the installment payments.

Checks by our correspondent showed that one golden rule of hire purchase is that the seller can reclaim the vehicle if the buyer defaults in paying the instalment and the money already paid will not be recovered.

“I was under my boss for some years to learn the spare parts trade,” Uche started as he told his story.

“When I wanted to leave, I used the money I saved to secure a shop and buy some things to sell. Later, I ran into some debts that affected my business. So I decided to go into commercial driving.

“I moved to Ogun State and a friend took me to a tricycle dealer who said I could pay in instalment. It was a new tricycle; the total cost was N1.3m. The agreement was that I would be paying the sum of N15,000 every two weeks,” he said.

For Uche, getting the necessary papers signed and bringing the two guarantors were not the problem. The hurdle, since the agreement was signed, has been keeping up with the payment.

The 32-year-old said, “I tell you, it has not been easy. They say we make money but there are a lot of things we drivers need money to do. Apart from trying to build a family, the cost of repairs, the cost of buying food, paying rent, and even registering with the tricycle association are what we face.”

As a bachelor, he fears building a family when he has yet to get his life together would be a mistake he might live with for the rest of his life.

“Marriage? I cannot do that for now; I am facing a lot of things. How would I cope if I brought a family into this situation? I have siblings who I send money to back home. I cannot manage my own family now.

 “The country is hard right now. I am not comfortable. Everybody is just managing. It is even difficult to be consistent with the payment by instalment.” he added.

Findings by our correspondent revealed that the cost of a new tricycle has increased significantly between 2021 and 2024 by over 200 per cent. In 2021, a tricycle cost about N300,000. However, the same tricycle goes for more than N1m in 2024.

Tricycle owners who spoke with further stated that the costs of repairs and vehicle maintenance had also jumped exponentially. Many claimed this was caused by the depressing condition of the country’s economy.

A Micra cab is a commercial vehicle common in Ibadan, Oyo State. Due to its popularity, the rush to have a Micra cab is continuously high. However, the cost of securing the cab has skyrocketed. The situation is even worse for drivers who got the vehicle on a hire purchase.

Our correspondent learnt that a vehicle bought on a hire purchase often costs more than when the buyer wants to pay for it at once. That way, the seller gains from allowing the buyer to pay a certain sum in instalments.

A 48-year-old Micra driver, Sola Adeniyi, told our correspondent that he got a fairly used Micra vehicle on a hire purchase for the sum of N1.9m in 2021 when the market price was N2m.

The 48-year-old said that the agreement reached was for him to pay the sum of N18,000 weekly which would take him about 26 months or two years to complete the payment for the vehicle and take full ownership.

“As of the time I wanted to get it in 2021, it cost N1.9m if you are getting it on a hire purchase agreement. If you are paying for it at once, it was something around N1.2m.

“It is difficult to maintain the weekly payment and sometimes, I default if the car develops a fault. I use the money I am supposed to remit to the owner to repair it.

“Everything is harder now that the economy is not favourable. Everything is costly. I have a family I take care of,” he lamented.

Findings by our correspondent showed that a new Micra vehicle costs between N2.7m and N3n if the buyer intends to pay at once. Securing the cab through a hire purchase comes with about 50 per cent increase.

The father of three said he was still making payments as he defaulted sometimes and hoped to complete the payment by the end of the year so he could finally claim total ownership of the vehicle.

“Once, they (the owners) threatened to reclaim the cab if I could not keep up because I had defaulted for some weeks. I had to borrow some money to pay that week’s N18,000,” he added.

Like Adeniyi, many commercial drivers share similar experiences from driving commercial vehicles secured on an instalment plan. The experience, while bad, can quickly become worse if the vehicle develops a fault that keeps it off the road for an extended period.

Our correspondent gathered that in some cases, sellers act on their threats by recovering the vehicles from the drivers because they could not keep up with the instalment payment.

Umar Sanni, who hails from Katsina, had such an experience.

Leaving one’s state of origin in search of greener pastures in another state is not an uncommon practice in Nigeria. Sanni’s story after he journeyed hundreds of miles across new cultures to start a new life bears a semblance with that of the Israelites who sought the Promise Land.

Sanni relocated from Katsina to Sabo, Ogun State, to live with a friend also from Katsina who had relocated a few years earlier. To start his new adventure, his friend took him to a motorcycle dealer in Sabo, a densely populated area after the Longbridge on the Lagos-Ibadan Expressway.

At the dealer’s shop, the parties agreed to buy a motorcycle on hire purchase in the sum of N1.4m with a further agreement to pay N15,000 weekly.

After all was said and done, Sanni became a commercial motorcyclist plying the popular roads around the expressway. Luckily, the Lagos ban on motorcycles did not affect his trade, but the event that changed his fortune was the sickness of his brother back in Katsina.

Sanni started sending money home for medical treatment; this included what he had managed to save to pay the weekly instalment. Consequently, for the next four weeks, he could not deliver his side of the bargain to the motorcycle seller.

“I was sending money home for treatment including the money I was supposed to pay for the motorcycle. After I could not pay for a month, the motorcycle was collected.

“They did not want to give me back the amount I had paid. I called the person who took me to the dealer to beg him before the motorcycle was released. I completed the payment in November 2023,” he added with a sigh of relief.

Now, he proudly owns a motorcycle and can decide when to call it a day. However, the economic situation of the country is enough motivation to keep him on the road for almost a whole day.

“I work at night too because, at that time, some passengers would just be returning from work,” he added.

Another motorcycle rider who chose to be identified as Stanley told Sunday PUNCH how he manages to cope with the economic hardship amid the choking demands that come with a hire purchase agreement he has to meet weekly.

The native of Delta State said despite leaving Lagos for Ogun after the state government banned commercial motorcycles, the debt had continued to haunt him.

Stanley said, “A new motorcycle costs over N950,000. If you want to do a hire purchase, it is about N1.3m. How can someone who wants to become a motorcycle rider afford that money? Hire purchase is what many of us do to survive.

“I pay N15,000 weekly. There are other things that you will need money to do.”

Findings by revealed that many commercial drivers agree to a hire purchase without proper scrutiny of the content of the documents. It was also observed that the pressure of looking for a source of income pushes them into signing exploitative agreements. This puts a heavier burden on them to meet up with the agreed payment by instalment.

For some, there is no vacation from work as they fear being behind on the agreed payment and losing everything to the seller.

Meanwhile, vehicle dealers who spoke with our correspondent identified illiteracy as one of the problems that affect many commercial drivers. They noted that there were procedures that should be followed to prepare a genuine hire purchase agreement.

A founder of a commercial vehicle dealership company in Lagos who preferred to be identified as CEO George told our correspondent during an interview that vehicles acquired through a hire purchase were often insured and the buyer provided with necessary documents to avoid arrest by law enforcement agents.

He, however, highlighted that some commercial drivers were not educated enough about hire purchase agreements, and therefore leaving the agreements to break down and the parties involved fall apart.

“When someone comes to us and says they want to purchase a vehicle on hire purchase for commercial purposes, they will fill out a form and provide details we can use to certify that they are qualified to buy on hire purchase or lease agreement as we call it. After filling out the form, the person can attach their bank account statement if they have an account. Sometimes we also ask for guarantors for security purposes.

“After the papers have been prepared, the buyer has to make an initial payment which we call security payment. This can be 30 per cent of the total price of the vehicle.

“We ensure that whichever vehicle anyone wants to buy is insured against accidents. The owner can pay for the repairs so they (the buyer) can quickly get back on the road to avoid missing their deadline. Later, we process the repair invoice and the driver gets back their money. Sometimes, the buyer can insure the vehicle themselves.”

The CEO told that the economic situation of the country should not be an excuse to default on payments.

“We understand that the economy of the country is bad right now but as the costs of vehicles are high, so also is the cost of transportation. Paying in instalments according to the agreements depends on the commitment of the owner; the buyer can still work and get enough money to pay if they are really serious about their job,” he said.

In Nigeria, the Hire Purchase Act, 2004, guides the agreement between parties who want to go into the contract. Section 20 of the Act, defines hire purchase as “a bailment of goods in pursuance of an agreement under which the property in goods will or may pass to the bailee (buyer)”.

Legal experts who spoke with our correspondent on the matter noted that a fundamental component of a genuine hire purchase agreement was that the product would become the buyer’s as soon as he completed the instalment payment. The failure of the buyer to this obligation when due meant that the seller could take back the product.

A corporate practice lawyer, Michael Afolabi, told that despite the laws in Nigeria guiding hire purchase agreements, exploitation was still a common problem.

He said, “The negotiation powers of the parties in a hire purchase contract are not the same. The seller often drafts the hire purchase agreement and it is not beyond the realm of contemplation that such an agreement will be drafted in his favour.

“This situation demands that the buyer in the hire purchase agreement engages the service of a lawyer before appending his signature on the contract because once signed, the seller would be unable to plead lack of knowledge of the content of the contract. Such a contract will be binding on both parties.

“Another way in which the seller can exploit the buyer under a hire purchase agreement is misrepresentation of the terms of the contract against the buyer. In this connection, there appears to be a misunderstanding of the essence of hire purchase agreement within the general Nigerian society.”

The legal practitioner said that the hire purchase agreement could fall apart if the buyer failed to pay the instalment, adding that it meant that the seller could act on that default and recover the vehicle.

“So the event that a hire purchase agreement breaks down, the parties merely revert to their positions before the contract, as the contract becomes terminated. Parties may however pursue a claim against the other if one party breaches any of the terms of the hire purchase agreement,” he added.

Afolabi further called for a review of hire purchase laws in Nigeria to prevent exploitation.

He said, “However, the law regulating hire purchase transactions in Nigeria is out of date, there needs to be an overhaul of the regulation of the hire purchase as it stands in Nigeria. The current law as it stands in Nigeria does not seem to favour the buyer.

“There should be enforcement of stricter regulations to shield customers from deceptive advertising, unfair terms, and unscrupulous lease practices. Stricter controls and oversight procedures should be put in place to guarantee openness, equity, and adherence to consumer protection legislation.

“Establishing effective and easily accessible dispute resolution procedures is necessary to settle disagreements between hire purchase companies and their clients.”

A commerical transaction lawyer, Marvis Oduogu, during an interview with said it is possible for vehicle dealers to exploit buyers by including terms and conditions that will make repayment difficult for the commerical drivers.

He noted that a vehicle seller or dealer who does this usually has the hidden intention of repossessing the vehicle immediately the buyer defaults.

Oduogu said, “Car sellers can structure hire purchase agreements in a way that makes the overall cost of the vehicle excessively higher than the market value for the hirer. They may include hidden fees or additional charges that buyers/hirers are unaware of initially.

“These fees can inflate the total cost. Also, since ownership is not transferred until the end of the agreement, car owners have the leverage to repossess the vehicle if the buyer misses payments.

“Since a hire purchase agreement involves making a down-payment or deposit and paying the balance along with interest over a specified time, even though agreements may provide for flexibility, buyers should carefully review terms, understand costs, and be aware of potential exploitation. Seeking legal advice before signing any hire purchase agreement is advisable to protect buyers’ interests.”

Advising commercial buyers regarding hire purchase agreement, the labour law expert said, “The potential buyer who anticipates the likelihood of a default should rather go for a contract of sale credit, where the property in the vehicle would pass to him absolutely at the point of contract, and the seller would only be entitled to recover the outstanding balance and not the vehicle.

“However, if the potential buyer would rather prefer a hire purchase, he should then contact the owner at the earliest opportunity, explain his predicament and apply for a variation of the payment terms of the hire.

“Also, the potential buyer should review his hire purchase or conditional sale agreement to see if it includes Payment Protection Insurance. Depending on the circumstances, he may be able to make a claim under this insurance. If they don’t pay back the arrears, the creditor will usually issue a default notice (usually after three months). After this notice, they can take further action to repossess the goods.”

However, a financial advisory expert, Joseph Onitayo, said maintaining instalment payments for a hire purchase agreement could be challenging when faced with other expenses. He noted that the economic situation of the company also contributed to this burden on commercial drivers.

He said, “Economic conditions, particularly monetary policy set by central banks, can affect interest rates. During periods of low-interest rates, hire purchase agreements may become more attractive as borrowing costs decrease. On the other hand, during times of high-interest rates, the cost of borrowing for hire purchase agreements may increase, potentially making them less affordable for some individuals.

“The availability of jobs and overall employment rates can impact individuals’ ability to make regular payments on hire purchase agreements. In a robust economy with ample job opportunities, people are more likely to have a stable income, making it easier to meet their financial obligations.

“However, during economic downturns or recessions, higher unemployment rates can lead to financial instability and difficulty in making payments on hire purchase agreements.”

While noting that an advantage of a hire purchase deal is that it gives people the opportunity to purchase the vehicle they need even if they don’t have the full funds available, he warned that buyers should be careful of making hasty decisions regarding such arrangements.

He said, “While a hire purchase agreement can provide a solution for those who cannot afford full payment, there are also factors to consider. These agreements often involve interest charges, fees, and other costs, which can make the overall cost of the vehicle higher than if purchased outright.

“It’s crucial to carefully review and understand the terms and conditions of the agreement before committing. It is recommended to compare different financing options, such as leasing or bank loans, to determine which option best suits one’s financial situation and needs. Consulting with a financial advisor or specialist in this area can also provide valuable insights and guidance tailored to your specific circumstances.

“When the agreement is signed, it is important to maintain open communication with the lender. If you anticipate difficulty in making a payment, reach out to them in advance to discuss possible solutions or alternatives. They may be able to offer temporary relief options or provide guidance based on your specific circumstances.”

Speaking with our correspondent on the issue, the Lagos Sector Commander of the Federal Road Safety Corps, Babatunde Farinloye, said while many commercial drivers were usually in a hurry to make enough money to pay their instalments, the law would take its course regardless of any excuse.

He said, “Traffic laws are meant to protect them. They should not endanger their lives because they want to meet up with their installment payments; it is not a reasonable excuse. We also will not allow any infractions to go unnoticed because the drivers want to make money to pay for their vehicles.

“So it would not matter if the driver claims he is trying to meet up with the payment. We will not take that excuse from them. That is not acceptable. The essence of laws is to protect lives and vehicles on the road.

“So you cannot tell us that because you want to meet up with payment, you want to kill yourself. You are in a hurry for what? To quickly make the money to pay the creditor? It will not stand and we do not subscribe to that.

“They are too focused on making money; they may not even have time to go and register their vehicles because they are always in a hurry to recoup the money to pay their creditors.”