the following are the main characteristics of a hire purchase agreement
- A down payment called a deposit is made first
- followed by the fixed installments at regular intervals
- payments are made in a specified period of time
- the buyer then takes possession of the goods
- the buyer does not become the owner of the goods
- the buyer becomes the owner after paying the last installment
- item bought may not be sold until the payment is completed
- Legally the item bought remains the property of the seller until the last payment (installment).
- the seller can repossess the item if the buyer defaults(fails to pay)
- it is suitable for selling durable goods such as furniture, stoves, refrigerators