Question

define hire purchase system​

Answer 1

Hire purchase agreements are not seen as an extension of credit.

In a hire purchase agreement, ownership is not transferred to the purchaser until all payments are made.

Answer 2

ANSWER :

★ Hire purchase system comes under Hire Purchase Agreement Act 1972. Hire purchase system refers to a system under which the buyer agrees to pay the price of the good bought in periodical instàllment which includes both a portion of the cost of the goods and interests for deferred payment to acquire the immediate pośseśsion for use but the ownership of such goods pasśes to the buyer only on the payment of the last instàllment.

• ✎ Under hire purchase system there are two parties — one is the purchaser and another is the seller. The purchaser under hire purchase system is known as Hire purchaser or Hirer and the seller is known as Hirė seller or Hire vendor and the agreement between them for purchase or sale of goods is called the Hirė purchase agreement.

• ✎ The amount which has paid by the hire purchaser to the hire vendor on the date of signing the hire purchase agreement is called Down payment and the balance amount after down payment, the purchaser have to pay within some periodical intervals along with interest for deferred payments which is called Instàllments.