Hier Purchase System

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HIER PURCHASE SYSTEM

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WHAT IS HIRE PURCHASE

•• It is an agreement to the hire

It is an agreement to the hire goods with

goods with

an opinion to purchase after payment of

the agreed hire installments. Ownership of

the goods remains with the vendor until

the opinion to purchase is excercised

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FEATURES OF HIRE PURCHASE

SYSTEM



There is an agreement between the

There is an agreement between the seller and the purchaser

seller and the purchaser

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The position of the goods immediately passes from the seller

to the buyer on

to the buyer on signing the agreement

signing the agreement

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The buyer will make payment in installment over a period of

time

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The ownership of the goods will remain with the seller and

passes to the buyer on the payment of last

passes to the buyer on the payment of last installment

installment

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Each installment is treated as hire charge till the last

installment is paid.

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Cont…..

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_{The buyer has the opinion to return the goods to}

the seller and can ter

the seller and can terminate the agreement f he

minate the agreement f he

does not want to pay the rest of the installment.

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If there is any default in payment of any

installment, the seller has a right to repossess

the goods sold on hire purchase and forfeit the

amount already received either in down

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•• HIRE PURCHASE PRICE-

HIRE PURCHASE

PRICE-••

_{The hire purchase price means the total}

payable by the hirer under the hire purchase

agreement in order to complete the purchase of

or acquisition of the property in the goods to

which the agreement relates and includes any

some so payable by the hirer under the hire

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•• Net hire purchase charge [sec8(1)(d)]

Net hire purchase charge [sec8(1)(d)]

•• Net hire purchase charges in respect of

Net hire purchase charges in respect of

the goods sold on hire purchase means

the difference between the net hire

purchase price and the net case price of

the goods.

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•• Hire purchase agreement-

Hire purchase

agreement-•• The hire purchase agreement most content the following

The hire purchase agreement most content the following

particular



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Hire purchase vs Credit sale

•• In credit sale the property i.e., ownership

In credit sale the property i.e., ownership

and possession is transferred to the

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Hire purchase vs Installment sale

•• In case of installment system it is not only the position

In case of installment system it is not only the position

but also the ownership of the goods which is

but also the ownership of the goods which is transfer

transfer

to the buyer immediately at the time of agreement.

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