Hire-Purchase System for Purchasing Cars

Hire-purchase system is a type of installment payment system where the buyer can purchase goods and pay for them in installments. In this system, the buyer takes possession of the goods but the ownership remains with the seller until the final payment is made. This system is commonly used for purchasing high-value items like cars, appliances, and furniture.

Gopal's Purchase of Cars from Telco Co.

Gopal purchased 4 cars from Telco Co. on hire-purchase system. The cash price of each car was Rs.2 00 000. Gopal was required to pay 25% of the cash price immediately and the remaining amount in installments. Let's break down the payment plan:

- Cash price of each car: Rs.2 00 000
- Total cash price for 4 cars: Rs.8 00 000
- Immediate payment required: 25% of total cash price = Rs.2 00 000
- Remaining amount to be paid in installments: Rs.6 00 000

Advantages of Hire-Purchase System

Hire-purchase system offers several advantages to the buyer:

- The buyer can purchase high-value items without having to pay the full amount upfront.
- The buyer can take possession of the goods immediately and start using them.
- The installment payments are spread out over a period of time, making it easier for the buyer to manage their finances.
- The buyer can negotiate the payment plan and choose a plan that suits their budget.

Conclusion

Hire-purchase system is a popular payment system for purchasing high-value items like cars. Gopal purchased 4 cars from Telco Co. on hire-purchase system and made an immediate payment of 25% of the total cash price. This system offers several advantages to the buyer, including the ability to purchase goods without paying the full amount upfront and the flexibility to choose a payment plan that suits their budget.

50000