MUHAMMAD BILAL

BBA(HONS)
HIRE PURCHASES AND INSTALLMENTS
INSTALLMENT PURCHASE SYSTEM

Installment Purchase System:

An installment purchase system is a credit sale in which payments are made in installments over a period of time. In
this system, the buyer gets the possession as well as ownership of the goods right at the time of signing the
agreement.
FEATURES OF INSTALLMENT PURCHASE SYSTEM

Under installment purchase system, the buyer gets the immediate possession as well as the ownership of goods. The
seller can not responses the good if the buyer made default in the payment of installment but he/she can sue against
the buyer for the recovery of amount due.
HIRE PURCHASE SYSTEM

Hire Purchase System:

 A hire purchase (HP) agreement is a credit agreement. You hire an item (for example, a car, laptop or television)
and pay an agreed amount in monthly payments. You do not own the item until you have made the final payment.
THE MAIN FEATURE OF HIRE PURCHASE FINANCE ARE:.

The hire purchaser becomes the owner of the asset after paying the last installment.

Every installment is treated as hire charge for using the asset.

 Hire purchaser can use the asset right after making the agreement with the hire vendor.
BASE OF DIFFERENCE