Advantages and disadvantages of the hire purchase agreement

ADVANTAGES OF HIRE PURCHASE AGREEMENT

  • Buyers can manage to buy expensive goods
  • Buyers have a possibility of obtaining special reduction (price cuts)




  • Buyers benefit if the rate of inflation is greater than the cost of credit
  • Payments are spread over a period of time he can save money for other
  • Items bought are used while paying for them

DISADVANTAGES OF HIRE PURCHASE AGREEMENT

  • cost of buying goods on credit is more expensive because of interest
  • Buyers are made to buy what they cannot afford
  • buyer suffers with instalments for a long time




  • Items bought can be repossessed if the buyer fails to pay the full instalments
  • buyer cannot sell the item until he has finished paying for it
  • buyer will not be the owner until the final instalment has been paid
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