Hire purchase system is a kind of retailing under which goods are sold on conditional basis

madugundurukmini By madugundurukmini, 8th Sep 2013 | Follow this author | RSS Feed | Short URL http://nut.bz/2by1d9yy/
Posted in Wikinut>Business>Selling A Business

Hire system is different from instalment system or deferred payment system.

Hire purchase system

Hire purchase system is a kind of retailing under which goods are sold on conditional basis. The goods are delivered to the consumer at the time purchase. The buyer is required to pay the price in instalments. The goods are treated on hire and their ownership remains with the seller until final instalment is paid. In case the buyer fails to pay instalments, the seller has the right to take back the goods. According to James Stephenson, `the hire purchase is a form of trade in which credit is grated to the buyer on the security of lien on the goods.'

He can only file a suit for recovery of unpaid instalment amount.

Hire system is different from instalment system or deferred payment system. Under instalment system, the buyer becomes the owner of goods and takes Passions of goods at the time of first instalment. He makes payment in instalments at regular intervals. In case of default in payment, the seller cannot take back the goods. He can only file a suit for recovery of unpaid instalment amount.

Goods must be durable

Hire purchase system is suitable for selling costly products for which the buyer cannot make the total payment at once. Goods must be durable, of standard quality and their demand should be stable. The articles should be such that, if necessary, they can be easily taken back and resold. Thus, high priced, easily identifiable and durable goods enjoying steady demand are suitable for hire purchase trading

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Comments

author avatar Fern Mc Costigan
8th Sep 2013 (#)

Very informative piece filled with lots of useful tips

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