Question

difference between ordinary purchase
and hire purchase

Answer 1

Answer:

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Answer 2

Hire purchase includes payment of the whole amount in parts with interest.

Explanation:

• Ordinary purchase includes the purchase of an asset with the immediate payment of the whole amount on the hand to the vendor.
• While in hire purchase the asset is acquired with the down payment and the rest of the money is paid in parts with the interest.
• In an ordinary purchase, the ownership of an asset is transferred immediately but in the hire purchase, the ownership gets transferred after the payment of last due.

• In an ordinary purchase, there is no need to pay interest, but in the hire purchase, the interest is liable to pay on each part of the due payment.
• In an ordinary purchase, the vendor cannot repossess the asset from the owner but in the hire purchase, the vendor can do so when there is a fault in payment.