Hire Purchase

Hire purchase (abbreviated HP, colloquially sometimes never-never) is the legal term for a contract, in which persons usually agree to pay for goods in parts or a percentage at a time. It was developed in the United Kingdom and can now be found in Australia, China, India, Jamaica, Japan, Malaysia, New Zealand, and South Africa. It is also called closed-end leasing. In cases where a buyer cannot afford to pay the asked price for an item of property as a lump sum but can afford to pay a percentage as a deposit, a hire-purchase contract allows the buyer to hire the goods for a monthly rent. When a sum equal to the original full price plus interest has been paid in equal installments, the buyer may then exercise an option to buy the goods at a predetermined price (usually a nominal sum) or return the goods to the owner. In Canada and the United States, a hire purchase is termed an installment plan; other analogous practices are described as closed-end leasing or rent to own.

If the buyer defaults in paying the installments, the owner may repossess the goods, a vendor protection not available with unsecured-consumer-credit systems. HP is frequently advantageous to consumers because it spreads the cost of expensive items over an extended time period. Business consumers may find the different balance sheet and taxation treatment of hire-purchased goods beneficial to their taxable income. The need for HP is reduced when consumers have collateral or other forms of credit readily available.

Read more about Hire PurchaseStandard Provisions, The Seller and The Owner, The Hirer's Rights, The Hirer's Obligations, The Owner's Rights, Hire Purchase in Australia, Hire Purchase in Malaysia

Other articles related to "hire purchase, hire purchases, purchase, hire":

Royscot Trust Ltd V Rogerson - Facts
... Andrew Rogerson wanted to get a second hand Honda Prelude on hire purchase ... its policy was only to lend money for hire purchase if 20% of the total cost was paid in the deposit (1200/7600 = 15.7%) ... off, dishonestly, as he knew it was not allowed under the terms of the hire purchase agreement ...
Hire Purchase in Malaysia
... Hire purchases agreement are commonly known as H.P agreement in Malaysia and it is used by financial institutions in Malaysia to fund the purchase of consumer goods, vehicles and other ... In Malaysia, The legislation governing hire purchase transactions is the Hire Purchase Act 1967, which came into force on 11 April 1968 after hire purchase became popular in the acquisition of expensive consumer ... Purchasing cars is the most common type of hire purchase agreement in Malaysia and the repayment could served up to 9 years from the date of ...
Shogun Finance Ltd V Hudson - Facts
... A rogue went to buy a Mitsubishi Shogun on hire purchase ... Under s.27 Hire Purchase Act 1964 a non-trade buyer of a car who buys in good faith from a hirer under a hire purchase agreement becomes the owner, so Mr Hudson would have been the owner if ...
Consumer Credit Act 1974 - Provisions of The Act - Part V: Entry Into Credit or Hire Agreements - Withdrawals
... These are similar to those found in the Hire-Purchase Act 1965, but cover all consumer credit and consumer hire agreements rather than the hire-purchase and instalment ... a confirmed agreement was introduced by the Hire-Purchase Act 1964, mainly to frustrate doorstep salesmen who would take advantage of an unsuspecting person and force them to sign up to an agreement ...

Famous quotes containing the words purchase and/or hire:

    Blessed assurance, Jesus is mine!
    O what a foretaste of glory divine!
    Heir of salvation, purchase of God,
    born of the Spirit, washed in Christ’s blood.
    Fanny J. Crosby (1820–1915)

    If you are well off and can afford to spend ten or twenty-five dollars a day to hire some patient soul to listen to your troubles you can be readjusted to the crazy scheme of things and spare yourself the humiliation of becoming a Christian Scientist. You can have your ego trimmed or removed, as you wish, just like a wart or bunion.
    Henry Miller (1891–1980)