What is hire purchase system

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Answer

Hire purchase is a method of buying goods where the buyer pays for the goods in installments rather than paying the full price upfront. The buyer can use the goods while making the payments and becomes the owner of the goods once all the payments are made. This system is commonly used for purchasing expensive items such as cars, furniture, and machinery.

The hire purchase process usually involves the following steps:

1. The buyer selects the goods they want to purchase and agrees on the price with the seller.
2. The buyer pays a deposit, usually 10-20% of the total purchase price.
3. The buyer signs a hire purchase agreement, which outlines the terms of the agreement including the amount of each installment payment, the interest rate, and the length of the repayment period.
4. The seller delivers the goods to the buyer.
5. The buyer makes regular installment payments until the full purchase price is paid.
6. Once all the payments are made, the buyer takes ownership of the goods.

Some advantages of the hire purchase system include:

1. More affordable: The buyer can purchase expensive goods without having to pay the full price upfront, making it more affordable.
2. Easy to obtain: Hire purchase is a readily available financing option, making it easy for buyers to obtain.
3. Flexible: The buyer can negotiate the terms of the agreement to suit their needs, including the length of the repayment period and the amount of the deposit.
4. Ownership: The buyer becomes the owner of the goods once all the payments are made.

Some disadvantages of the hire purchase system include:

1. Interest rates: The interest rate on hire purchase agreements can be high, making it more expensive in the long run.
2. Ownership: Until all the payments are made, the buyer does not own the goods, and the seller can repossess the goods if the buyer defaults on payments.
3. Limited flexibility: The terms of the agreement are usually fixed, meaning that the buyer cannot change the terms once the agreement is signed.

Overall, the hire purchase system is a useful financing option for buyers who want to purchase expensive goods but cannot afford to pay the full price upfront. However, it is important to carefully consider the terms of the agreement before signing to ensure that it is the right option for your needs.

Answer

Thanks

Answer

It is a process of business activity

Answer

Hire-purchase is a credit purchase. The price under hire-purchase systemis paid in instalments. The goods are delivered in the possession of the purchaser at the time of commencement of the agreement. Hire vendor continues to be the owner of the goods till the payment of last instalment

Answer

It is a system in which goods are sold on credit basesBut remember there is two way to sold on credit one is installment and another is hire purchase If u sold good on installment you became the owner of goods as you start paying installment but in hire purchase same as installment you have to pay installment amount but you became owner only when u paid all installmentIn installment in case of  default on payment you have right to case in court but in hire purchase you don't have right to case because ownership is not transfer Only you can do is take back you solded good if it is damage loss should be incurred by seller

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Https://edurev.page.link/fEtSRdKiWicyAwdv7

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Hire-purchases paid in istallment, purchses not complete until last installment..

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Hire purchasing system is a credit purchase

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Bhade par goods dena

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